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2020 Domestic 5G Market Demand Forecast

Time: 2020-06-03
1. Overview
        With the rapid development of mobile Internet, more devices are accessing mobile networks, and new services and applications keep emerging. The sharp surge in mobile data traffic has put huge pressure on existing networks. As 4G networks can no longer meet growing user demands, the construction of 5G networks has become imperative.
        A 5G network consists of three main parts: wireless network, bearer network and core network. The rollout of 5G requires technical upgrades to both wireless and bearer networks, which also drives the upgrade of supporting optical modules. Specifically, fronthaul optical modules for wireless base stations are upgraded from 10G to 25G. In 2020, domestic 5G base station construction entered a large-scale phase, triggering explosive growth in demand for 25G fronthaul optical modules.
2. 25G Optical Module Demand Estimation
        According to data released by the Ministry of Industry and Information Technology (MIIT), China had deployed 126,000 5G base stations by the end of 2019. On March 24, 2020, MIIT issued the Notice on Promoting the Accelerated Development of 5G to accelerate nationwide 5G construction. It was projected that the annual new 5G base station deployment would reach 700,000 to 800,000 units in 2020.
Forecast of the Number of Domestic 5G Base Stations in the Past 5 Years
Figure 1 Forecast of the Number of Domestic 5G Base Stations in the Past 5 Years
        Based on the above forecast and an average consumption of 10 optical modules per base station, the total demand for fronthaul optical modules would reach 7–8 million units in 2020.
        5G fronthaul mainly adopts two technical solutions: fiber direct drive and passive wavelength division.
            • Fiber direct drive: Adopts 25G grey optical modules, including SFP28 25G SR with a transmission distance of 300m, as well as SFP28 25G LR and 25G Bidi modules with a transmission distance of 10km.
            • Passive wavelength division: Adopts 25G colored optical modules, namely SFP28 25G CWDM optical modules.
        Calculated on the basis of 6 pairs of 25G interfaces required per 5G base station: if 25G grey optical modules account for 40% and 25G colored optical modules account for 60% of the total demand, the demand for 25G grey optical modules will be 3.36–3.84 million units, and the demand for 25G colored optical modules will be 5.04–5.76 million units. Overall, the annual demand for 25G optical modules in 2020 is expected to hit the ten-million level.
        This trend is also verified by the centralized procurement projects of China’s three major telecom operators in Q1 2020. The domestic market demand for 25G optical modules reached an unprecedented high in 2020, making it a critical year for optical module manufacturers to expand customers and capture 5G market share.
Table 1 Partial 5G Procurement Projects of the Three Major Operators in Q1 2020
Bidding Date Operator Project Name Procurement Content
1/3 China Mobile 2019–2020 Qinghai Mobile Passive Wavelength Division Equipment Framework 2,000 sets of passive wavelength division equipment, including 12,000 pcs of 25G colored optical modules
2/14 China Mobile Liaoning 2020 Passive Wavelength Division Equipment Bidding Project 8,000 sets of 1:12 dual-star passive wavelength division equipment, including 48,000 pcs of 25G colored optical modules
2/20 China Mobile Hainan 2020 25Gb/s Passive CWDM Framework Procurement for 5G Fronthaul 3,000 sets of passive wavelength division equipment, including 18,000 pcs of 25G colored optical modules
2/21 China Mobile Beijing 2020 Passive Wavelength Division Equipment Procurement Project 11,909 sets of passive wavelength division equipment, including 44,454 pcs of 25G colored optical modules
3/13 China Mobile Jiangsu 2019 5G Passive Wavelength Division Colored Light Equipment Procurement 16,920 sets of passive wavelength division equipment, including 67,680 pcs of 25G colored optical modules
3/18 China Mobile Sichuan 2020–2021 Passive Wavelength Division Multiplexing Centralized Procurement 19,921 sets of passive wavelength division equipment, including 109,646 pcs of 25G SFP+ colored optical modules
3/24 China Mobile Chongqing Passive Wavelength Division System Procurement 8,800 sets of passive wavelength division equipment, including 49,200 pcs of 25G colored optical modules
        Beginning in 2019, Motek Optoelectronics has started mass production of 25G optical modules, in line with the requirements of China's 5G network pre-transmission technology method, the product family can be provided with the following models, welcome to inquire about.
Table 2 25G SFP28 Optical Modules available from Motech Optoelectronics
Product Model Form Factor Transmission Rate Application Standard Transmission Medium Transmission Distance
SFP-25G-SR SFP28 25G 25GBase-SR MMF 100m
SFP-25G-SR SFP28 25G 25GBase-SR/CPRI MMF 100m
SFP-25G-CSR SFP28 25G 25GBase-CSR MMF 400m
SFP-25G-CSR SFP28 25G 25GBase-CSR/CPRI MMF 400m
SFP-10/25G-SR SFP28 10G/25G 25GBase-CSR/10GBase-SR/CPR MMF 100m
SFP-10/25G-CSR SFP28 10G/25G 25GBase-CSR/10GBase-SR/CPRI MMF 400m
SFP-25G-LR SFP28 25G 25GBase-LR SMF 10km
SFP-25G-BIDI-LR SFP28 25G 25GBase-LR SMF 10km
SFP-25G-CWDM-LR SFP28 25G 25GBase-LR SMF 10km
SFP-10G/25G-LR SFP28 10G/25G 25GBase-LR 10GBase-LR SMF 10km
SFP-10G/25G-BIDI-LR SFP28 10G/25G 25GBase-LR 10GBase-LR SMF 10km
SFP-10G/25G-CWDM-LR SFP28 10G/25G 25GBase-LR 10GBase-LR SMF 10km
        Moduletek Limited is at your service.
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