OE Solutions expects its sales in the third quarter to be halved compared to a year prior due to delays in telcos’ 5G deployment from the COVID-19 pandemic.
South Korea’s largest optical transceiver maker expects sales of 29 billion won in the third quarter. It posted 60.6 billion won in the third quarter of 2020.
OE Solutions marked 29.4 billion won in sales and 4.2 billion won in operating profits in the second quarter of this year. It had an operating margin rate of 14%.
A company spokesperson said it saw higher-than-expected demand from overseas vendors in the second quarter and expected a similar market situation in the third quarter.
It saw sales of 9.4 billion won from its FTTH (fiber to the home) and MSO (multi system operator) wired equipment in the second quarter, which was over triple that of 2.6 billion won they made in the first quarter.
South Korean telcos have slowed down their investment into 5G networks due to the COVID-19 pandemic. It is expected that they will ramp up investments again sometime in the fourth quarter at the earliest.
However, demand for wired goods in countries where such infrastructure is not widely installed rose during the outbreak, people familiar with the matter said.
Optical transceivers change optical signals to electrical ones, and vice versa. It is installed in both wired and wireless equipment.
OE Solutions began supplying its laser diode to a Chinese counterpart in the second quarter of this year. Laser diode is dominated by Mitsubishi and Sumitomo of Japan and Broadcom in the US.