Duration of Slowdown Will VaryAcross Markets

Equipment categories

Estimated length of slowdown

Long-haul

Metro

Fiber

> 5 years

2-3 years

Place new fiber

Light new fiber

Light new channels

EDFAs, WDM equipment, DCM

2-3 years

< 6 months

SONET ADM; regenerators; transponders/line cards

1-2 years

< 6 months

Source: McKinsey & Co. and Goldman Sachs joint study

Recovery = f(bandwidth demand growth)-f(inventory burn)

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