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Optical Communication Market - Forecast(2024 - 2030)
Optical Communication Market Overview
The
global Optical Communication Market is estimated to grow at a CAGR of 6.93%
during the forecast period 2022-2027 and reach $24.12 billion by 2027, from $16.81 billion in 2021. Since that the internet now accounts for a
significant portion of the global communication system, it is safe to conclude
that optical communication has a promising future. A number of large end-user
industries are driving the market to grow at a breakneck pace. Fiber optic and Wavelength division multiplexing (WDM) technological advancements, synchronous optical networking solutions, surveillance, and
telecommunications, among other things, are excellent opportunities for the
optical fiber communication market's future. The market for optical communications
networking is being pushed forward by the promise of seamless connectivity for
long-distance networking. Fiber optic transmission is substantially faster than
electrical transmission through copper cable. Because the technology transmits
electrical data using infrared light, it provides a more gratifying experience
for the user. This technology aids in the creation of dependable, secure, and
quick networking systems for end-users in the case of long-distance
transmission. One of the constant drivers of market growth is the expanding capacity
of high-speed data transmission. With boundless bandwidth capacity, the
internet user market is expanding, boosting the market growth for optical
communication and photophones.
Optical Communication Market Report Coverage
The report: “Optical Communication
Market – Forecast (2022-2027)”, by IndustryARC covers an in-depth analysis
of the following segments of the Optical Communication market
By Component: Optical Transmitter (LEDs, Laser Diodes),
Optical Receiver, Optical Fiber, Line Card, Optical Transceiver (100G, 200G,
400G, 25G, 40G, 50G) and Others
By Devices: Optically Active Devices (LD Chip, Full Tuner
Blue LD Module, LN Optical modulator, VCSEL Chip, Digital Coherent Receiver),
Optically Passive Devices (WSS Module, Conventional Optical Switch Module, Lens,
Opto Isolators), L2-L3 Switches, Routers, PON Systems
By Cable Type: Aerial Cables, Armoured Cables, FTTx Cables, Micro
Cables and Unarmoured Cables
By Photometer: Optical Spectrum Analyzer ,Optical Modulation
analyzer, Oscilloscope, BERT (Bit Error Rate Tester), OTDRs, Arbitrary waveform
generator, Optical Power Meter
By Optical Fiber Type: Single Mode Fiber, Multi Mode Fiber
By Application: Medical Industry, Mechanical Inspection, Communication,
Lightning and Decoration, Defense, Broadcasting. Data Storage, Telecommunications,
Networking, Industrial/Commercial and Others
By Geography: North America (U.S, Canada, Mexico), South
America (Brazil, Argentina and others), Europe (Germany, UK, France, Italy,
Spain, Russia and Others), APAC (China, Japan India, SK, Aus and Others), and
RoW (Middle east and Africa)
Key Takeaways
- The communication, electronics, and information technology industries are constantly evolving. The latest computers in the internet medium is also creating new opportunities in the optic communication business. Advances in the telecom business, such as the deployment of 5G network towers around the world, will be a huge opportunity.
- The internet of things (IoT) technology is generating a beneficial environment for the optical communications system as well, with an increased focus on smart gadgets. Fiber optic connection and innovation in robust telecom infrastructure will reach new heights for higher efficiency in end-user industries' operating systems.
- In the domains of astronomy and space research, a lot of progress is being made. There are numerous potential for market growth in satellite technology and space communication on a global scale..
Optical Communication Market, By Region, 2021
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Optical Communication Market Segment Analysis – By Application
Telecommunications dominated the Optical
Communication Market with a value share of approximately 24% in 2021, The
growing demand for faster and more reliable communication networks, as well as
the rise in the number of data centres and the use of cloud-based services, are
driving the global optical communication market forward. The expansion of
broadband connections in developing nations, as well as developments in VoIP,
LTE, and 5G network technologies, present enormous market growth prospects. The growing advancement in 5G technology and the growing usage of
optical fibers is expected to positively influence its market growth. In June
2021, Corning Incorporated launched its new optical fiber offering the Corning
SMF-28 Contour optical fiber, for telcos to build out 5G networks and address
expanding number of connected devices as well as advances in cloud computing. The
launch of 5G has brought enhanced capacity and lower latency straight to
networks. There is growing demand of various types of cables for 5G because of
its scalability, security and ability to handle the vast amount of backhaul
traffic being generated. This, in turn, is expected to create a huge market
opportunity for the optical communication market in the telecommunication
industry.
Optical Communication Market Segment Analysis – By Component
Optical Fibers remain a key segment for Optical
Communication accounting for $5.1 Billion in 2021. An optical fiber is the
transmission medium within FOC systems. Optical fiber is the crystal clear and
stretchy filament which transmits the light from a transmitter end to a
receiver end. When the optical signal enters at the transmitter end of fiber
then Optical Communication transmits to the end of the receiver using the
optical fiber. Optical fiber are used in single mode and/or multi-mode cable.
The significant growth in the investments & expansions is set to boost the
market growth rate. By December 2024, India is aiming at 70% fiberisation of
towers, average broadband speeds of 50 Mbps and 50 lakh kms of optic fibre
rollouts at a pan-India level. In June 2020, Google Cloud is stepping up
efforts to grow its public cloud computing footprint in Southeast Asia, and has
earmarked Thailand, Philippines, and Vietnam as the next rapidly growing
countries for adoption of public cloud services across a number of key
customer-oriented verticals.
Optical Communication Market Segment Analysis – By Geography
Asia-Pacific dominated the Optical Communication Market with a value share of approximately 36% in 2021, Consumer electronics, automotive, and industrial verticals all have a strong presence in Asia Pacific. This region has emerged as a global hub for major investments and corporate developments. This region's users have upgraded their connectivity options from 3G to 4G. 5G mobile technologies are being developed in Asian markets, with commercial deployments expected in Japan and China by 2021. In the U.S. the telecom industry is highly fueling the optical communication market. The evolution of upcoming 5G superfast wireless network has resulted in the higher capital spending for the U.S. wireless carriers. Moreover, the growing government initiatives towards the deployment of broadband is also the most significant factor that is driving factors for the optical communication market. The further advancement in the medical infrastructure, high per capita expenditure on healthcare and the rising number of minimally invasive surgeries in the U.S. is leading to the increasing need for optical cables. Additionally, the increasing medical tourism due to the cost effective healthcare facilities is enhancing the optical communication market.
Optical Communication Market Drivers
Increasing Demand for FTTH
Fiber to the home (FTTH), also known as fiber to
the premises (FTTP), is the installation and use of optical fiber from a
central point directly to individual buildings such as residences, apartment
buildings and businesses to provide high-speed internet access. Optical
communication through FTTH is faster & efficient compared to the
conventional media, hence the adoption rate is significantly rising which is
set to be the major driver for the market. Fiber is steadily replacing DSL
subscriptions, which have dropped by 10% over the past two years. Adding to
this, the demand for fiber optic cable based internet connectivity i.e., FTTH
has grown drastically with the imposition of global lockdowns due to covid-19.
As stated by Organization for Economic
Co-operation and Development (OECD), the need to move work and home life
activities online during the COVID-19 pandemic led to a record 21.15 million
new fixed broadband connections including fiber, DSL, cable and others in the
year to end-December 2020. Fiber optics exceed 30% of fixed broadband
subscriptions across the OECD’s 38 member countries, up from 12% a decade ago,
and is by far the fastest growing broadband technology, with subscriptions up
14% in 2020 from 2019, outpacing a 5% rise in overall fixed broadband
subscriptions. Major countries such as Austria, Belgium, Chile, Ireland, Israel
and the United Kingdom all increased their fibre connections by more than 50%
in 2020.
Growing Number of Data Centers
The explosive growth of Internet Protocol (IP)
traffic is driving data centers to the Zettabyte Era, much of this increase in
traffic is dominated by video services and associated machine-learning
applications. In the data center, the network connects thousands of servers,
and all servers work together to complete work tasks. With the advent of the
information age, data center traffic has occupied majority of the global
communication network traffic. Data centers require reliable, high bandwidth
components that help to preserve the value of network’s physical
infrastructure, hence optical communications is used. Optical communication
technology is widely used in data centers, including server connections of
several meters, and docking of data centers in many places around the world. A
data center consists of thousands of connected servers to store everything
people do online. Thus, as server-to-server traffic is increasing rapidly, it
has become a challenge to meet the rising data storage and processing demand
with existing technologies. Optical networks use signals encoded in light to
transmit information in different types of networks. Hence the growing number
of data centers with significant investments are analysed to boos the market
growth rate during forecast period 2021-2026. In June 2021, Equinix and GIC
announced to expand xScale™ data center program to 32 facilities worldwide
Optical Communication Market Challenges
Susceptibility of Optical Fibers to Physical Damage and Transmission Losses
Fiber is thinner and lighter than metallic
wiring, hence it is a sensitive communication system and highly prone to
physical damage on mishandling. Owing to its properties, it can be easily cut
by accident during building renovations or rewiring. Since fiber optic cables
can transmit much more data than metallic networks, fewer cables service a
greater number of people, therefore a damage in one cable disrupt service for a
large number of businesses and individuals. Fibers are also sensitive to
bending, making laying fibers around corners a tricky business. Fiber optic
networks are also susceptible to radiation damage or chemical exposure.
Optical Communication Industry Outlook
Technology
launches, acquisitions, and R&D activities are key strategies adopted by
players in the market. Optical Communication top 10 companies include:
- Huawei
- Nokia
- Ericsson
- Fujitsu
- Cisco
- Broadcom
- Lumentum
- II-VI
- Corning
- YOFC
Recent Developments
- In February 2020, Infinera and II-VI Incorporated, a global leader in optical communication modules, collaborated to bring XR optics based networking solutions to the market.
- In September 2021, II-VI Incorporated joined SmartTunable Multi-Source agreement group for Wavelength-Tunable Transceivers.
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