Dell’Oro published an update to the Data Center Capex 5-Year Forecast report in July 2021. Server spending is forecast to grow at a compound annual growth rate of 11 percent over five-year, comprising nearly half the data center capex by 2025.
Global spending on broadband access equipment and CPE is expected to have a 3% CAGR from 2020-2025, which is a solid increase from a 0% CAGR in our January 2021 5-Year forecast edition. The combination of continued residential subscriber growth and increased capacity utilization rates noted by global broadband providers will more than offset the negative impacts of component shortages and labor limitations.
Nearly 18 months since the COVID-19 pandemic began, the worst of the market turbulence appears behind us. Increased vaccination rates–albeit not fast enough for some countries and regions–have led to an unwinding of lockdown mandates and boosted economic activity. In addition, economic stimuli from central governments have provided additional market tailwinds.
We anticipate that the demand for Microwave Transmission equipment will increase for a number of years and that much of the growth will be from rising sales of E-band radios. We forecast E-Band radio transceiver shipments to grow at a compounded annual growth rate (CAGR) of nearly 30 percent.
Our more optimistic 2021 outlook is prompted by strong market performance that has so far exceeded our expectations. (1Q21 revenue was up 4% Y/Y in contrast with our flat-market forecast.) Although some of the growth in 1Q21 might have been reflective of pent-up demand, it came mostly from the public sector, while the private sector has not recovered yet, paving the way for more growth in the remainder of the year and potentially next year…