Update on 400+G pluggables market. NeoPhotonics' management hosted an Optical Trends and Technologies call on 400+G pluggables. The team said the deployment of 400+G is a megatrend. The company has a full portfolio of components for embedded systems, components for pluggables, and complete pluggable modules addressing the entire 400+G opportunity. NeoPhotonics quantified its 400+G TAM as $0.5bn in 2021 growing to $3+bn in 2025.

2021 400ZR market small as Webscale qualifications take longer. NeoPhotonics says the industry will ship ~250,000 400+G ports in 2021 worth ~$500mn. More than 90% is traditional embedded components opportunity for NPTN, and less than 10% is 400ZR/400ZR+ modules. Management said that entering 2021 it expected to have Webscale qualifications for its 400ZR DD-QSFP and 400ZR OSFP modules by mid-year. However, the timing has slipped as the processes are taking longer. The company said it is shipping modules to multiple customers against purchase orders, but the volumes are consistent with being in the trial and qualification phases.

Steep 2022 ramp expected for 400ZR/400ZR+. The company expects the industry to ship ~450,000 400+G ports in 2022 worth over $1bn. It sees ~100,000 of these ports being 400ZR/400ZR+ with a value of nearly $500mn in 2022. Management is upbeat on the ability of 400ZR/400ZR+ to address DCI and Telecom Metro and long haul markets. The company's primary 400ZR+ module form factor for Telecom Metro/ROADM and long haul applications is CFP2-DCO.

Guidance reiterated. NPTN reiterated 2H21 guidance including ~$15mn sequential revenue growth for both 3Q21 and 4Q21. We believe strong demand for 400+G embedded system components is the primary near-term driver. The second driver likely is the growth of the 400ZR laser / components business as NPTN supplies module competitors for their internal needs and Webscale trials.

NPTN

NeoPhotonics Corporation

Communications Equipment

400G Pluggables Update: Slower Uptake Near-Term, Larger Opportunity Long-Term