Optical Interconnect Market

SKU: DMICT2435 | Last Updated On: Jan 05 2023 | Available Formats

Optical Interconnect Market Expected to reach a high CAGR of 13.7% By 2029: DataM Intelligence

Optical Interconnect Market is segmented By Product Category (Optical Engines, Optical transceivers, Silicon Photonics, Connectors, Cable assemblies), By Interconnect Level (Rack level, Chip and broad level, Long-haul level), By Fiber Mode (Single-Mode Fiber, Multimode Fiber), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2023-2030

Optical Interconnect Market size was worth US$ XX million in 2022 and is estimated to show significant growth by reaching up to US$ XX million by 2030, growing at a CAGR of 13.0% within the forecast period (2023-2030).

Optical Interconnect Market Scope

Metrics

Details

Market CAGR

13.0%

Segments Covered

By Product, By Interconnect Level, By Fiber Mode, and By Region

Report Insights Covered

Competitive Landscape Analysis, Company Profile Analysis, Market Size, Share, Growth, Demand, Recent Developments, Mergers and acquisitions, New Product Launches, Growth Strategies, Revenue Analysis, and Other key insights.

Fastest Growing Region

Asia Pacific

Largest Market Share 

North America

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Communication over optical cables is known as the optical interconnect. The bandwidth of optical lines can range from 10 Gb/s to 100 Gb/s, a substantially larger bandwidth than that of conventional cables. As well as on motherboards and internal computer components, the technology is currently being investigated to connect computers to mobile devices.

Optical interconnect technology has supplanted traditional electrical interconnects to meet the ever-growing market for high bandwidths, transfer speeds and the requirement to handle large volumes of data between locations globally. It was an obvious and necessary step, particularly in telecommunications. Broadband communication systems and data centers increasingly frequently use optical interconnects. Transceivers, which can send and receive optical signals, are typically coupled to fiber-optic cables via interconnected lasers and detectors.

There are many different specs, speeds, form factors and protocols for transceivers. The data transfer type, ideal speed and distance are the main determinants in choosing the right transmitter for an application.

Optical Interconnect Market Dynamics

The rising demand for communication bandwidth drives the market share for optical interconnect.

Rising demand for communication bandwidth drives the market share for optical interconnect

Optical interconnects have replaced traditional electrical interconnects to address the demand for large bandwidths that allow quick transfer speeds and fulfill the need to manage huge amounts of data across data centers globally. The relevant technology currently offers connectivity solutions in end-user industries like the military, aerospace and automotive. It is used in telecommunication and data communication applications.

The demand for bandwidth has expanded more than ever due to the introduction of several new services for various types of communications and their value-added entities. Compared to electrical interconnects, optical interconnect enables greater bandwidth provision while enhancing computer performance.

Massive demand for high-speed, high bandwidth data transfer was caused by increased cloud computing activities, rapidly rising investments from the industrial and enterprise sectors and the need for technology to extend data center capabilities. The corresponding factor has increased optical connectivity demand in the global market.

Vendors like Ciena, Huawei and Nokia have been pushing the boundaries of modern optics and enabling the development of optical interconnect technologies by providing highly scalable, effective interconnections. Competing vendors are developing 800G-capable coherent solutions that could power the next generation of optical interconnects, including Ciena and Infinera.

The infancy stage of technologies involved creates a huge challenging atmosphere for the growth of optical interconnect 

The international IT industry has recently experienced significant disruptions. Governments are enhancing capabilities by integrating cutting-edge systems like Big Data Analytics and the Internet of Things (IoT), among others, focusing on the accuracy of optic interconnects.

There are numerous optical connectivity technologies in various phases of development right now. III-V quantum wells are said to be the most cutting-edge technology. High-index contrast designs are also being used in a variety of chip layouts. The rest technologies are currently in the fundamental or applied research stages; thus, they are not yet prepared for the market. They still need extensive research to perform better.

The use of optical interconnects in dependable integrated circuits is significantly hampered by the incapability of mature III-V semiconductor materials to be generated economically using current CMOS technology. Sizable research investments are required to integrate components and create integrated circuits employing optical interconnects.

The effectiveness of silicon-based technology for optical interconnects still has to be proven, even if it is compatible with modern integrated circuit technology. In most applications, optical interconnect are often employed for links needing the greatest data speeds because electrical interconnect technology is still acceptable and optical components' reliability and performance need to be greatly enhanced. Because the technologies used are still in their infancy, it limits market expansion.

COVID-19 Impact on Optical Interconnect Market

The ongoing COVID-19 pandemic has had serious socioeconomic repercussions and significant worldwide morbidity and mortality. Multiple manufacturing services have been put on hold because of the COVID-19 pandemic and the drop in exports and imports have further impacted the market share for optical connectivity.

In contrast to other markets, COVID-19 positively affected the worldwide optical connection sector. The pandemic sparked a new telecommuting craze that sharply increased the need for more data to be transported safely and securely. As a result, the number of data centers worldwide skyrocketed, increasing the need for technologies that carry data more quickly, including optical interconnects.

The COVID-19 era of the internet has brought about dependable connectivity with decreased latency, increased speed and bandwidth. Customers are online more often than usual due to the recent influenza epidemic. Wi-Fi access points have been severely damaged, resulting in traffic jams and heavier demands on interconnecting points.

Furthermore, demand for bandwidth soared to unprecedented levels, escalating the optical interconnect market. Internet usage increased between 40% and 50% in U.S. and Canada in the first quarter of 2020. Portugal, Spain and UK all saw a 50% increase in internet usage. From residences to data centers, much more internet traffic has been migrating upstream; according to Nokia, upstream traffic increased by 30% in U.S. in March 2020.

Optical Interconnect Market Segment Analysis 

The global optical interconnect market is segmented on product, interconnect level, fiber mode and region.

Optical Transceivers can operate in a large temperature range of -40 to +90° C and are available with various options, which is boosting the segment’s growth

The global optical interconnect market is segmented based on products: optical engines, optical transceivers, silicon photonics, connectors, cable assemblies and others. Optical Transceivers hold a dominating position in the optical interconnect market. An optical transceiver is a small but powerful device that can transmit and receive data. The information is transmitted across an optical fiber at extremely fast speeds and over great distances in fiber optics. The transceiver transforms electrical impulses into optical (light) and electrical signals and is a crucial component of a fiber optic network. 

It can be plugged into another data network device with a signal-sending and receiving capability. Optical transceivers are available in various form factors, sizes and shapes. The data type required speed and distance determine which form factor should be used. Different regulations, known as protocols, govern how various data types are conveyed. Since they can move large amounts of data through a network, optical transceivers are crucial in most industries in telecom applications. The adaptable part can be inserted into a network device or integrated into it. It is available in a range of sizes and shapes. The form factors of optical transceivers determine their wide varieties. For difficult situations, Radiall offers a variety of optical transceiver form factors. 

They offer a wide range of applications with excellent performance and reliability. Radiall's Optical Transceivers can operate in a large temperature range of -40 to +90° C and are available with various options. Several package options are offered, including pluggable, surface mount, multisource agreements and specific custom packages covering bit rates up to 10 Gbps

Optical Interconnect Market Geographical Analysis

Asia-Pacific nations have constructed their fiber-optic backbone networks, which is boosting the demand for optical interconnect in the region

The majority of Asia-Pacific nations have constructed their fiber-optic backbone networks. Through bilateral agreements, numerous cross-border terrestrial fiber-optic cable systems have been created between neighboring nations.

In addition to increasing the capacity of current international transmission lines, particularly for landlocked nations, linking these scattered cross-border terrestrial cables will also lower the cost of transit, making the internet more accessible to end users. The region's Internet speed, quality and dependability will improve due to a connected terrestrial network. The cost will be minimal as the interconnection will primarily use the domestic telecommunications networks already in each country. 

Through national and subregional initiatives of United Nations member states, the Economic and Social Commission for Asia and the Pacific (ESCAP), information and communications technology (ICT) connections in the Asia-Pacific have significantly increased in recent years.

According to ESCAP assessments, China accounts for 50% of the region's fixed-broadband users and 75% of the region's fixed-broadband consumers are located in East and North-East Asia. For every 100 residents, there are around 40 fixed-broadband users in the Republic of Korea. 18 ESCAP member states are at the other end of the spectrum, with fewer than 2 fixed-broadband customers per 100 residents.

The Asia-Pacific Information Superhighway (AP-IS) initiative has been put forth to address the uneven development of ICT and the widening digital divide in the Asia-Pacific.

Optical Interconnect Market Competitive Landscape

The global optical interconnect market is highly competitive with local and global key players. The key players contributing to the market's growth are INNOLIGHT, 3M, Molex, NVIDIA Corporation, Lumentum Holdings Inc., II-VI Incorporated, Smiths Interconnect, Cailabs, Fiberplex Technologies, LLC, Fujitsu Ltd., Broadcom Inc., TE Connectivity, Accelink Technology Co. Ltd, Infinera Corporation, CISCO SYSTEMS INC., Sumitomo Electric Industries, Ltd and others.

The major companies are adopting several growth strategies, such as product launches, acquisitions and collaborations, contributing to the global growth of the optical interconnect market.

  • For instance, on June 01, 2021, Sumitomo Electric Industries, Ltd.'s innovative technologies developed and introduced AirEB, a multi-fiber connector with a developed beam that has optical performance tolerant to the contamination on the connector mating faces. It contributes to cost reduction for massive fiber optic network operators.

II-VI Incorporated

Overview: II-VI Incorporated is engaged in manufacturing engineered materials and optoelectronic components and developing products for various industries, including optical communications, life sciences, semiconductor capital equipment, aerospace & defense and industrial and consumer markets. The company has a presence in over 75 locations in 18 countries globally.

The company deals with various product categories, including Optical Communications, Laser Systems, Electronic Devices, Thermoelectrics, Optoelectronic Devices, Laser Processing Tools, Epitaxial Wafers, Ceramics & Composites, Optics, Laser Components, Silicon Carbide Substrates and Rare Metals. Majority of revenue for the company came from Photonic Solutions, followed by Compound Semiconductors and others.

Product Portfolio: 100G 100m SWDM4 QSFP28 Optical Transceiver: The transceiver module is designed for 100 G ethernet over duplex mode and can support a length of 75 meters to 150 m on OM3 to OM5. The product is compliant with QSFP28 MSA and IEEE 802.3bm CAUI-4. The product offers digital diagnostics functions via the I2C interface, as specified by the Application Note AN-2171 and QSFP28 MSA. 

Key Development

  • On April 23, 2021, II‐VI Incorporated inaugurated the II-VI Technology and R&D Center in Shanghai, with nearly 600 employees. The Center will leverage its broad talent base, including its engineers and seniors, to be a world leader in technology and product development.

The global optical interconnect market report would provide approximately 61 market data tables, 54 figures and 212 pages.

Report suggestion:

  • Global Optical Transceiver Market
  • Global Cable Market

Frequently Asked Questions

What is the Projected CAGR value of the Optical Interconnect Market Scope?

Optical Interconnect Market Scope is expected to grow at a CAGR of 13.7% during the forecasting period 2022-2029.

Which region controlled the global market during 2022-2029?

North America region Controls the Optical Interconnect Market Scope during 2022-2029.

Which is the fastest growing region in the Optical Interconnect Market Scope?

Among all regions, Asia Pacific is the fastest growing market share during the forecast period.

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