Internet in Every Household in China: A Look at the Numbers

Nov. 28, 2016

Shenzhen image shutterstock_22387534.jpgEach day we move closer toward a more connected world. The insatiable demand for data is growing at exponential rates (3.4 ZB to 10.4 ZB in five years) as we, the end consumers, continue to leverage our cloud connected apps economy1. This global phenomenon is affecting every region of the world, and none more so than China.

Advancing Internet networks and speeds nationally is high on the agenda for China’s government, and continues to climb in its list of priorities. Increased policy focus in this area has led to unprecedented growth of opportunities in the optical communications sector.

In 2013, the People’s Republic of China (PRC) government announced an ambitious new policy whereby all new residences located within reach of a network must be equipped with fiber network connections2. By 2014, China had installed over 20.6 million kilometers of fiber-optic cable; in that same year, telecom services generated RMB 1.8 trillion (USD $296 billion). That year, China ranked 82nd in the world for Internet speeds when the government committed to spending $182 billion USD on speeding up the Internet3.

By the end of 2016, it is estimated that a full 80 percent of China’s Internet users will be on fiber optic networks, pushing it ahead of South Korea to rank number one globally4. The numbers don’t stop there; more needs to be done to bring Internet connectivity to each household in China.

As recently outlined in the 13th five-year plan—China’s roadmap for the next five years—the central government is targeting to expand fiber-optic network coverage to all cities in China, providing access speeds of over 1 Gbps5. The government has also set a goal to increase fiber-optic network penetration of smaller towns and villages to 98% nationally, aiming to provide broadband networks with 50Mbps access speeds to more than half of rural households by 2020.

This explosion in connectivity is bringing with it an explosion in data traffic, increasing China’s need for hyper-scale Data Centers with higher speed and higher density optical links. In turn, the explosion in data traffic is driving down the size of optical transceivers and increasing throughput, while requiring better power efficiency and a significant reduction in the cost of delivering a bit.

Many of China’s major telecom OEMs, transceiver and module companies rely on MACOM’s key enabling technologies to provide them with the speed and flexibility needed to meet growing domestic demand. To meet these needs, MACOM continues to grow our portfolio of lasers, photodetectors, drivers, TIAs, CDRs, PMDs, optical sub-assemblies (TOSA/ROSA), Silicon PICs and crosspoint switches for line and client-side systems.

In addition to currently building the world’s largest Data Center, set to complete this year, China is also the single largest consumer of PON optics in the world. In fact, in 2015, the global FTTx optics market was driven to record levels on the back of a number of positive developments in the China market6.

In access, MACOM is focused on delivering FTTH and wireless infrastructure, including optical wireless back haul and optical wireless front haul for 4G and future 5G networks. MACOM has shipped over 300 million Laser Drivers, Limiting Amplifiers, and Transimpedance Amplifiers components into the cost sensitive fiber to the home space. This speaks to the speed and scale of network infrastructure development around the world, especially in China. MACOM is doing its part to keep pace.

Stepping back to assess these staggering statistics, it’s easy to see the challenges—and the exciting opportunities—that lay ahead for photonic and optical component vendors supplying the Chinese market. Growth of demand on this scale calls for smaller, faster, more robust solutions, with the agility and manufacturing capacity to support massive network build outs. MACOM is committed to meeting the burgeoning demand for data in China with high-performance solutions that enable high-bandwidth connectivity throughout every city, village and household in the country.

 

Cisco Global Cloud Index: Forecast and Methodology, 2015–2020
2 New residences required to provide fiber network connections
China to spend $182 billion to boost Internet by end of 2017
4 According to a spokesperson from China's Ministry of Industry and Information Technology, quoted in Xinhua News
5 China’s 2020 Vision: Asserting Global Technology Leadership (Racepoint Global, April 2016)
6 FTTx market hits record levels with China deployments


Disclaimer

All financial guidance projections referenced in this post were made as of the publication date or another historical date noted herein, and any references to such projections herein are not intended to reaffirm them as of any later date. MACOM undertakes no obligation to update any forward-looking statement or projection at any future date. This post may include information and projections derived from third-party sources concerning addressable market size and growth rates and similar general economic or industry data. MACOM has not independently verified any information and projections from third party sources incorporated herein. This post may also contain market statistics and industry data that are subject to uncertainty and are not necessarily reflective of market conditions. Although MACOM believes that these statistics and data are reasonable, they have been derived from third party sources and have not been independently verified by MACOM.