Optical Interconnect Market - Forecast(2024 - 2030)

Report Code: AIR 0352 Report Format: PDF + Excel

Optical Interconnect Market Overview

The Optical Interconnect Market size is forecasted to reach $17.5 billion by 2027, growing at a CAGR of 8.46% during the forecast period from 2022-2027Globally, growing adoption of cloud computing across organizations to increase business efficiency is set to drive the Optical Interconnect market. As demand for high speed and large capacity communications increases, optical interconnect technology based on silicon photonics has become an emerging technology for solving the bandwidth problems can be considered as a major factor driving the market growth of Optical Interconnect Market. Presently, optical interconnects are used in data centers and broadband telecommunication networks can also considered as a factor influencing the market growth. Furthermore, Fiber network cables are physically connected to optical transceivers coupled with integrated lasers and detectors which have the capability of transmitting as well as receiving an optical signal. Such Embedded optical transceivers and transceiver modules coupled with Reflex Photonics technology can be used for advancing optical interconnect based solutions. Such factors can be considered vital in boosting the market growth of Optical Interconnect during the forecast period 2022-2027.

Report Coverage

The report based on: “Optical Interconnect Market-Forecast (2022-2027)”, by IndustryARC, covers an in-depth analysis of the following segments of Optical Interconnect Market Industry Outlook.

By Cable Type– Single-Mode, Multi-Mode
By Interconnect Level Metro and Long Haul Optical Interconnect, Board-to-Board and Rack-level Optical Interconnect, Chip and Board Level Optical Interconnect
By Data Rate – Less than 10 Gpbs, 10-40 Gpbs, 40-100 Gpbs, more than 100 Gpbs
By Distance- less than 1 Km, 1-10 Km, 10-100 Km, more than 100 Km
By Application: Telecommunications, Data Communications, Others.
By Geography: North America (US, Canada, Mexico),Europe (U.K., Germany, Italy, France, Spain & Others), APAC (China, Japan, South Korea, India, Australia & Others),South America (Brazil, Argentina & Others),RoW (Middle East & Africa)

Key Takeaways

  • Multi-mode cable is analyzed to witness the fastest growth with the highest CAGR of 9.25%, owing to growing shift of cloud-based data management.
  • Data communications is the fastest growing segment in Optical Interconnect Market and is estimated to grow at around CAGR 9.48% during the forecast period, owing to growth of cloud computing applications and rise in number of data centers.
  • North America Optical Interconnect Market held the largest share in 2021; owing to factor such as high investment on adopting high data rate optical interconnect in data centers from major market players in the region like Google LLC, Amazon and others.
  • Growing adoption of Cloud computing across organizations and rising number of data centers across the world are analyzed to significantly drive the global Optical Interconnect market during the forecast period 2022-2027.

Global Optical Interconnect Market Value Share, By Geography, 2021 (%)

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Optical Interconnect Market Segment Analysis - ByCable Type

Based on cable type, the Optical Interconnect market is segmented into Single-Mode and Multi-Mode. Multi-mode analyzed to witness the fastest growth with the highest CAGR of 9.25%during the forecast period 2022-2027, owing to rapid adoption of cloud computing and growing shift of cloud-based data management. Compared to single mode cable, multi mode fiber cable provides higher bandwidth at rapid speed over medium distances at lesser cost, thus raising its adoptability among data centers. Multi mode fiber cables are used for various applications such as data communications, broadcasting, military and healthcare purposes which increases the rate of adoption among industries. Furthermore, technological advancement in fiber optical cable can be a key factor in driving the growth of this segment. Such trends are set to drive its market growth in the long run.

Optical Interconnect Market Segment Analysis - By Applications

Based on applications, Data communications dominated the Optical Interconnect market with a share of 9.48% in 2021 and is also anticipated to witness significant growth during 2022-2027, owing to growth of cloud computing applications and rise in number of data centers. Optical interconnects are used as an attractive solution for accelerating bandwidth while reducing density and power consumption in high performance data communication systems, thus raising its adoptability. As per IEEE Communications Society survey in 2019, optical networks could provide up to75% energy savings in the data centers. Large data centers has significant interest in disposition of optical interconnect due to its high bandwidth and low latency. Such factors can be considered vital in boosting the market growth of optical interconnects in the long run.

Optical Interconnect Market Segment Analysis - By Geography

North America region accounted for the largest share of 36% in the global Optical Interconnect Market and is anticipated to have a significant growth during the forecast period the forecast period 2022-2027, owing to growing shift towards cloud computing or cloud-based environments. As per Cisco Systems Report, the cloud traffic is estimated to reach around 6844 Exabyte in 2021in North America, compared to other regions in the world. Such fact is vital for creating scope for the market. Moreover, high investment on adopting high data rate optical interconnect in data centers from some of the major market players in the region such as Google LLC, Amazon, Microsoft Corporation and others along with availability of technical expertise have also helped in aiding the market growth overtime. For instance in March 2021, Microsoft Corporation announced to invest $200 million in building two data centers outside of Chicago to provide faster access as well as wider range of Azure cloud services in the region. Such building up of new data centers increases the demand for optical interconnect for faster transmission of data, thus raising its adoptability. Furthermore, rising demand for Optical fiber cable from IT & telecommunication sector, increasing penetration of mobile devices and rising adoption of FTTH connectivity are some of the factors that influence the market growth.

Optical Interconnect Market Drivers

Growing demand for undersea telecommunication system is considered to be a factor that can drive the market forward.

Rising demand for undersea telecommunication system is considered to be a major driver for the growth of global optical interconnect market. Optical interconnect technology helps in receiving signals from network equipment and perform signal processing by converting digital signals to optical signals for transmission in the fiber network. The growing popularity of next-generation undersea transmission systems for faster data transmission has accelerated the demand for fiber optical interconnects to reduce the concerns such as cable damage by sharks and ship anchors. Moreover, increasing investments in next-gen undersea telecommunication systems will also increase the demand for optical interconnects. In February 2020, Facebook and global telecom majors China Mobile Ltd. and MTN Group Ltd collaborated and decided to invest $1 billion in expansion of next generation undersea telecommunication in Africa to provide faster internet connections to the African continent. Such investments can positively influence the demand for optical interconnect for reducing the damage in the long run.

Rising number of data centers can drive the market forward 

Rising number of data centers across the world for purposes of storing, processing and disseminating data is set to be one of the factors that can drive the market forward during the forecast period 2022-2027.Data centers require reliable and higher bandwidth that can support to preserve the value of network’s physical infrastructure.Optical interconnects technology has emerged as the successor to electrical interconnects to address future needs for the transfer of large volume of data volumes in continuously growing data centers as well as high-end computing systems. Additionally, high investment in establishing data centers will create opportunities for the growth of the market.For instance in February 2021, Amazon India announced to invest $1.6 Billion in construction of two data centers in Hyderabad. Similarly In June 2020, Oracle Corporation planned an investment on construction of second data center in Hyderabadto offer faster access and wider range of cloud services in the region. Such investments can increase the implementation of optical interconnect technology in data centers for the need of higher bandwidth, which can influence the market growth of Optical Interconnect in the long run.

Optical Interconnect Market Challenges

High initial investments associated with optical interconnect hamper the market growth.

Though optical interconnect have lot of advantages but high initial investment associated with optical interconnect has become a prime concern for every organization which acts as a major challenge restraining the growth of Optical Interconnect Market. The cost of implementing optical interconnect is quite expensive. Budget is the most important thing considered while organizations investing in advanced tools & technologiesOwing to the above mentioned factor, use of optical interconnect technology will be significantly impacted, thus hampering its market growth.

Optical Interconnect Industry Outlook

Partnership, Acquisitions, Collaboration, technology launches and R&D activities are key strategies adopted by players in the Optical Interconnect Market. The Optical Interconnect Market top 10 companies include:

  • II-VI Incorporated
  • Lumentum Operations LLC
  • Molex LLC
  • NVIDIA Corporation
  • TE Connectivity
  • Amphenol Corporation
  • Broadcom Inc.
  • Sumitomo Electric Industries, Ltd.
  • Juniper Networks, Inc.
  • Fujitsu Ltd.

Recent Developments

  • In November 2021, Lumentum Operations LLC announced to acquire NeoPhotonics Corporation. Through this acquisition, Lumentum will able to provide its optical components in fastest growing applications market such as cloud and telecommunication infrastructure to boost network speed and scalability. Such acquisitions will influence the growth of the market.
  • In September, 2021, TE Connectivity (TE), a global leader in connectivity and sensors, introduced the NanoRF Edge Launch connector to offer easy and standardized interface with VPX plug-in computing modules. This connector is the only solutions that can combine the RF with optical interconnect for military and radar RF embedded computing application, thus influencing the market growth positively.
  • In November 2020, Sterlite Technologies announced the acquisition of OptotecS.p. A, a leading provider of Optical Interconnect Products based in Italy. Through this acquisition, the companies will able to provide wide range of Optical Interconnect Products for Telecommunication, FTTH and Cloud Networks to customers across Europe, India and the Middle East. Such acquisitions will influence the growth of the market.

Relevant Report Titles:

Optical Communication and Networking Market – Forecast(2021 - 2026)
Report Code: ESR 75782

Silicon Photonics Market – Forecast (2021 - 2026)
Report Code: ESR 0133

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1. Optical Interconnect Market - Market Overview
    1.1 Definitions and Scope
2. Optical Interconnect Market - Executive Summary
    2.1 Market Revenue, Market Size and Key Trends by Company
    2.2 Key trends by type
    2.3 Key trends segmented by Geography
3. Optical Interconnect Market– Industry Market Landscape
    3.1 Comparative Analysis
    3.1.1 Product/Company Benchmarking-Top 5 Companies
    3.1.2 Top 5 Financial Analysis
    3.1.3 Market Value Split by Top 5 Companies
    3.1.4 Patent Analysis
    3.1.5 Pricing Analysis
4. Optical Interconnect Market – Startup companies Scenario Premium Premium
    4.1 Top 10 startup company Analysis by
        4.1.1 Investment
        4.1.2 Revenue
        4.1.3 Market Shares
        4.1.4 Market Size and Application Analysis
        4.1.5 Venture Capital and Funding Scenario
5. Optical Interconnect Market – Industry Market Entry Scenario Premium Premium
    5.1 Regulatory Framework Overview
    5.2 New Business and Ease of Doing business index
    5.3 Case studies of successful ventures
    5.4 Customer Analysis – Top 10 companies
6. Optical Interconnect Market - Market Forces
    6.1 Market Drivers
    6.2 Market Constraints/Challenges
    6.3 Porters five force model
        6.3.1 Bargaining power of suppliers
        6.3.2 Bargaining powers of customers
        6.3.3 Threat of new entrants
        6.3.4 Rivalry among existing players
        6.3.5 Threat of substitutes
7. Optical Interconnect Market – By Strategic Analysis (Market Size -$Million/Billion)
    7.1 Value Chain Analysis
    7.2 Opportunities Analysis
    7.3 Product Life Cycle/Market Life Cycle Analysis
8. Optical Interconnect Market– By Cable Type
    8.1 Single-Mode
    8.2 Multi-Mode
9. Optical Interconnect Market– By Interconnect Level
    9.1 Metro and Long Haul Optical Interconnect
    9.2 Board-to-Board and Rack-level Optical Interconnect
    9.3 Chip and Board Level Optical Interconnect
10. Optical Interconnect Market– By Data rate
    10.1 Less than 10 Gpbs
    10.2 10-40 Gpbs, 40-100 Gpbs
    10.3 more than 100 Gpbs
11. Optical Interconnect Market– By Applications
    11.1 Telecommunications
    11.2 Data Communications
    11.3 Others
12. Optical Interconnect Market - By Geography (Market Size -$Million)
    12.1 North America
        12.1.1 U.S
        12.1.2 Canada
        12.1.3 Mexico
    12.2 Europe
        12.2.1 UK
        12.2.2 Germany
        12.2.3 Italy
        12.2.4 France
        12.2.5 Spain
        12.2.6 Others
    12.3 Asia Pacific
        12.3.1 China
        12.3.2 Japan 
        12.3.3 South Korea
        12.3.4 India
        12.3.5 Australia
        12.3.6 Others
    12.4 South America
        12.4.1 Brazil
        12.4.2 Argentina
        12.4.3 Others
    12.5 ROW
        12.5.1 Middle East
        12.5.2 Africa
13. Optical Interconnect Market - Market Entropy
    13.1 New product launches
    13.2 M&A's, collaborations, JVs and partnerships
14. Optical Interconnect Market – Industry / Segment Competition landscape Premium Premium
    14.1 Market Share Analysis
        14.1.1 Market Share by Country- Top companies
        14.1.2 Market Share by type of business applications– Top 10 companies
        14.1.3 Best Practices for companies
15. Optical Interconnect Market – Key Company List by Country Premium Premium
16. Optical Interconnect Market - Company Analysis
    16.1 II-VI Incorporated
    16.2 Lumentum Operations LLC
    16.3 Molex LLC
    16.4 NVIDIA Corporation
    16.5 TE Connectivity
    16.6 Amphenol Corporation
    16.7 Broadcom Inc.
    16.8 Sumitomo Electric Industries, Ltd.
    16.9 Juniper Networks, Inc.
    16.10 Fujitsu Ltd.
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