SAN MATEO, Calif., May 23 – As a result of the downturn in telecom/datacom equipment shipments, the vertical cavity surface emitting laser (VCSEL) -based transceiver market dipped to $290 million in 2001, said a report from ElectroniCast Corp. The report said that the market grew from $245 million in 1999 to $388 million by 2000. ElectroniCast said that the market has begun to show some signs of recovery and will slowly begin expanding starting in 2003. Long wavelength VCSELs operating at 1300 nm and 1550 nm are in preproduction phase. "Early production deployments are expected by 2003, when the new VCSELs are proven reliable and new transceiver designs are slated to take advantage of these components," ElectroniCast Senior Analyst Saba Hailu said. "The use of long wavelength VCSELs in transceiver applications will be at 1310 nm. The current direction of 1550 nm VCSELs is to long haul and DWDM applications, most typically as a separate component in tunable products and as pump devices in amplifiers. Transceivers operating with VCSELs at 1310 nm will not create a new application space. All such applications are expected to be singlemode. They will compete with traditional low-cost Fabry-Perot edge emitters, and to uncooled DFB edge emitters. Their penetration will be in applications where single mode transceivers are already being deployed, such as in Gigabit Ethernet and Fibre Channel," Hailu said.