The DSLAM market is undergoing a correction.According to Dell'Oro Group, second-quarter DSLAM port shipments are down for the second quarter in a row. DSL port shipment volume will be approximately 12.1 million in Q2, down from a peak of 14.5 million in the fourth quarter of 2003.The firm expects port shipments in Q3 to drop to 11.5 million, rise to 12.7 million in Q4, and then remain relatively flat until Q3 2005.Meanwhile, subscriber adds haven't kept pace with port shipments. Worldwide, there were 7.5 million DSL subscriber adds in the second quarter, down from 8.2 million in the first quarter.Dell'Oro expects 7.7 million and 8.7 million subscribers adds per quarter over the next six quarters."There was a big run up over the past three quarters" in port shipments, says Tam Dell'Oro, founder of the market research firm that bears her name.DSL port shipments exceeded net adds by 80% on a worldwide basis during the past three quarters. This compares to an average of 35% during 2002, and 70% in 2003, which saw a significant run-up in port shipments in the second half."There seems to be a disconnect," Dell'Oro says, referring to the overbuild over the past three quarters.Why did it happen? Dell'Oro think some irrational exuberance set in after telecom's three-year nuclear winter."I think everybody was excited that things were doing well after the tough times," Dell'Oro says.Though she expects the correction to be temporary -- lasting another quarter or two as the extra capacity level drops -- Dell'Oro says the market could go one of two ways once ADSL buildouts are complete. It could either surge again as video services necessitate upgrades to take ADSL beyond 1M bit\/sec, or it could mature very quickly as operators look to get 20 years of carrier-class reliability from their ADSL equipment investments."Video services would likely prompt operators to upgrade their networks," Dell'Oro says. "But I'll bet anything that there will be no massive capital investment until the senior staff [at these operators] are convinced of a return on investment."Dell'Oro's Q2 findings do not indicate any significant shifts in market share among the key vendors. They also found that pricing stabilized in the quarter, which kept market revenue from falling faster than port shipments.