Due to changes in specification, Japan's FTTH (Fiber to the Home) deployment was slowed in the first half of 2004. However, with an increase in FTTH orders from Japan's main operator NTT as well as regional players such as KDDI, Yahoo BB, TEPCO (Toyko Electric Power), and KEPCO (Kansai Electric Power), Japan's FTTH business is set to take off once again. In the second half of 2004, transceiver orders are estimated to reach 100,000 units monthly, growing one-fold from the first half of 2004.

 

Delta, other than receiving monthly orders for 20,000 to 30,000 bi-directional transceivers from NTT, also obtained orders from XEP CO and Usen. APAC's order primarily comes from regional operators with monthly transceiver shipment estimated to be around 30,000 units while Optoway was awarded all of KDDI's transceiver orders.

 

NTT, which accounts for 70% of Japan's FTTH market share, decided to gradually replace bi-directional transceiver with PON (Passive Optical Network) transceiver beginning the second half of 2004, which led to a decline in Japanese shipment of transceiver in the first half of 2004.

 

With demand for PON transceiver visibly heating up, shipments are reaching 30,000 to 50,000 units monthly. Demand for bi-direction transceiver remains between 50,000 to 70,000 units monthly as a result of sustained demand from NTT for its original network and from regional operators.

 

Since PON transceiver is still at the early stages of development, all of NTT's 30,000 to 50,000 PON orders go to Hitachi and Lightron. However, Lightron will outsource some components to Taiwanese makers. Despite the entrance of Chinese maker Wuhan Research Institute of Post and Telecommunication into the bi-direction transceiver supply chain, the vast majority of orders remain with Taiwanese makers.