May 25, 2024
Optical Transceiver Market

Optical Transceiver Market Is Expected To Be Powered By Rising Demand For 5G Technology

The optical transceiver is an electronic device that transmits and receives digital data using light signals over fiber optic cables. Optical transceivers are used in fiber-to-the-home (FTTH) networks, fiber-to-the-desktop (FTTD) applications, data centers and telecommunication networks. It contains a transmitter that converts an electrical signal into an optical signal and a receiver that converts the incoming optical signal back into an electrical signal. The increasing demand for high-speed connectivity and the implementation of 5G technology are some of the key factors driving the growth of the global optical transceiver market.

The global optical transceiver market is estimated to be valued at US$ 11.28 billion in 2023 and is expected to exhibit a CAGR of 3.5% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:

Rising Demand for 5G Technology: 5G networks require higher bandwidth capacities and lower latencies compared to previous generations of wireless technology. Optical transceivers play a vital role in 5G infrastructure as they help in providing fiber connectivity between the core network and cell sites. The rapid deployment of 5G networks around the world is augmenting the demand for advanced optical transceivers with higher speeds and capabilities. According to estimates, over half a million new base stations will be installed globally between 2023 to support 5G networks, thereby fueling market growth over the forecast period.

Increasing Data Center Interconnectivity: Cloud computing and data center virtualization have increased the data traffic volumes manifold in recent years. This has spurred the demand for high-speed interconnectivity between data centers located in different geographic regions. As optical transceivers efficiently support high data transmission over long distances, their adoption in data center networks is rising. They enable the transmission of large volumes of data with minimum latency through dense wavelength-division multiplexing technology. The ongoing expansion and modernization of existing data centers are boosting market expansion.

Segment Analysis

The global optical transceiver market can be segmented based on transceiver type, data rate, distance, form factor, end-use, and geography. Based on transceiver type, the SFP and SFP+ transceivers segment is expected to dominate the market through 2030 owing to their growing adoption in enterprise data centers and telecommunication networks. SFP and SFP+ transceivers are compact in size and have high data transmission capabilities up to 16 Gbps.

PEST Analysis

Political: Government initiatives to develop digital infrastructure and promote fiber optic networks will positively influence the market. For instance, the BharatNet project aims to provide broadband connectivity to over 250,000 gram panchayats in India.
Economic: Growing data traffic driven by 5G deployment, cloud computing, and IoT adoption is fueling the need for high-speed transceivers. The market is estimated to grow at a CAGR of 3.5% through 2030 to surpass a valuation of US$ 11.28 Bn by 2024.
Social: Increasing internet penetration and growing usage of smart devices are driving demand for high-speed data transmission. By 2030, over 75% of the global population is expected to be online.
Technological: Advancements in communication networking technologies such as 400G and 800G Ethernet are spurring demand for high-speed transceivers capable of supporting bandwidth-intensive applications.

Key Takeaways

The global Optical Transceiver Market Share  is expected to witness high growth over the forecast period.

Regional analysis indicates that the Asia Pacific region is expected to dominate the market through 2030. Government projects aimed at digital connectivity and increasing investments by hyperscalers into data center infrastructure will drive the APAC optical transceiver market.

Key players operating in the optical transceiver market are Acacia, Oclaro, Sumitomo Electric, Accelink Technologies Co., Ltd., Broadcom, Cisco, II-VI Incorporated, Lumentum Operations LLC, INFINERA.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it