Optical Transceiver Market - Forecast(2024 - 2030)
Optical Transceiver Market Overview
The Optical Transceiver Market size is forecasted to reach US$13.9 billion by 2027, growing at a CAGR of 14.8% during the forecast period 2022-2027. An optical transceiver is a compact, potent device that can work as both a transmitter and a receiver. Optical transceivers convert the electrical signal from a switch or router into an optical signal that can be transmitted or received using fiber optic technology and light pulses. This is performed over a considerable distance at a high speed through single or multi-mode fiber. It can be plugged into or integrated into another data network device. The optical transceiver functions as a single module for information transmission and reception, much like a radio or telephone system does. Whether connecting racks to racks, the bottom to the top of a rack, data centers to data centers or enterprise networks to the network, optical transceivers can handle all storage, data, voice, and video traffic. Ethernet switches, SONET, as well as many other communication technologies, are compatible with optical transceivers. Manufacturers are integrating modern optical transceivers with features like the digital signal processor. They are compatible, offer a wide variety of transmission data rates and can provide long-range coverage. A high-speed optical transceiver's important components are constructed using CMOS technology. The standard, inexpensive printed circuit board with embedded optical waveguides can also be created from the optical transceiver. All these factors are driving the market growth of the Optical Transceiver market.
Report Coverage
The report: “Optical Transceiver industry outlook – Forecast (2022-2027)” by Industry ARC, covers an in-depth analysis of
the following segments in the Optical Transceiver
industry.
Key Takeaways
- The Ethernet Protocol segment by a protocol in the Optical Transceiver Market is expected to grow the fastest at an estimated CAGR of 18% during the forecast period, 2022-2027. The wide range of data rates is leading to the adoption of ethernet-based optical transceiver modules in network infrastructures ranging from small offices to hyper-scale data centers. Thus, leading to a high growth rate.
- The multi-mode fiber segment by fiber type in the Optical Transceiver Market is expected to grow the fastest at an estimated CAGR of 17.8% during the forecast period 2022-2027. The multimode fiber is cheaper due to the use of LED and enables propagation of multiple light modes. All these factors are driving the growth of the Optical Transceiver market size
- Asia Pacific by region is expected to grow the fastest, at an estimated CAGR of 17.8% in the Optical Transceiver Market during the forecast period 2022-2027. The rising usage of smart devices, rise in internet users, increased connectivity, expanding network infrastructure and the rise in high bandwidth-intensive applications are some of the factors boosting the Optical Transceiver market.
- Optical Transceivers can support a wide
range of technologies, including Ethernet, Fibre Channel, InfiniBand,
SONET/SDH/OTN, CPRI, OIF and PON. The optical transceivers function at the
required data rates. The above factors are driving the growth of the Optical Transceiver market.
Global Optical Transceiver Market Value Share, By Region, 2021 (%)
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Optical Transceiver Market Segment Analysis - by Protocol
The Optical Transceiver market by the protocol can be segmented into Ethernet (100G, 200G, 400G Ethernet
Compliant), Fiber Channel, InfiniBand, PCIe, SONET and CPRI. The Ethernet Protocol segment by a protocol in the Optical
Transceiver Market is expected to grow fastest at
a CAGR of 18% during the forecast period 2022-2027. The Ethernet protocol is mostly used for LAN settings with good
backward compatibility, better bandwidth and longer link distances to connect
hardware devices within a network by sending and receiving messages. When
installing an Ethernet network in any facility, Ethernet transceivers are
typically combined with Ethernet switches. A larger variety of transmission
speeds, including 10 Mbps, 100 Mbps and 1000 Mbps, as well as 10 Gbps, 25
Gbps, 50 Gbps, 40 Gbps, 100 Gbps and 400 Gbps, can be supported by ethernet
transceiver modules. Based on the need for capacity, this wide range of data
rates is the main driver behind the adoption of ethernet-based optical
transceiver modules in network infrastructures ranging from small offices to
hyper-scale data centers. All these factors are driving the growth of the Optical Transceiver market share. In April 2022, Nextplatform stated
that Nvidia (formerly Mellanox) revealed the new Spectrum-4 800 GB/sec Ethernet
switches at the GTC conference. The Spectrum-4 ASIC is
an integrated group of chiplets. The Hopper GPU is a monolithic die with 80
billion transistors, whereas the Spectrum-4 ASIC has chiplet architecture and
has 100 billion transistors in the entire complex. The Spectrum-4 ASIC is
implemented in the same 4-nanometer 4N process, which comes from foundry
partner Taiwan Semiconductor Manufacturing Co, which is also used to etch the
new " Hopper" GH100 GPU. The Spectrum 4 microprocessor has 256 ports
that can operate at 200 Gbps, 128 ports at 400 Gbps and 64 ports at 800 Gbps.
The latter is important for data center interconnects within a region that can
be spanned by Ethernet wires. All these factors are driving the growth of the Optical Transceiver industry.
Optical Transceiver Market Segment Analysis - by Fiber type
The Optical Transceiver market by fiber
type can be segmented into single-mode
fiber and multi-mode fiber. The
multi-mode fiber segment by fiber type in the Optical Transceiver Market is expected to grow the fastest at an estimated CAGR of 17.8% during
the forecast period 2022-2027. The multi-mode fiber is the kind of optical
fiber that allows the light to travel on many paths simultaneously and is mostly used in communication over short distances, such as inside a building or on campus. Multimode fiber optic cable has a
larger core, typically 50 or 62.5 microns, that enables multiple light modes to
be propagated. Multi-mode optic fiber cables are generally cheaper since they
transmit light using LEDs rather than single-mode fiber optic cables, which
employ relatively expensive lasers. Networks made of multi-mode fiber are
simpler to operate and maintain. Data is safely transmitted regardless of the
number of bends and their radius because multiple wavelengths are transmitted
across a multi-mode fiber, which reduces system losses. These are key factors
for growth. Multi-mode optical fiber cables are employed in smaller networks,
often those within a building, as these speed up resolution times and make
multi-mode fiber optic networks easier to troubleshoot. Multi-mode fiber optic
networks are mostly used in branch offices, which have bandwidth needs that
typically fall between 100 Mbps and 1 Gbps. The bandwidth of up to 10 Gbps can
be supported using multi-mode fiber optic lines. All of the above-mentioned
factors are fueling market expansion. In May 2022, EurekAlert stated that the
National Institute of Information and Communication Technology (NICT) successfully demonstrated the very first petabit per second transmission in
multi-core fibers with a standard cladding diameter of 0.125mm. The
researchers, led by Benjamin J. Puttnam, developed a transmission system using
wavelength division multiplexing (WDM) technology that enables an optical
bandwidth exceeding 20 THz incredibly. It combines the commercially recognized
optical fiber transmission windows known as the C- and L-bands to expand the
transmission bandwidth to include the recently researched S-band. Transmission
capacity is greatly increased by wide-band wavelength division multiplexing
technology, enabling Pb/s transmission in just 4 spatial channels. All these
factors are driving the growth of the Optical
Transceiver industry.
Optical Transceiver Market Segment Analysis - by End-user
The Optical Transceiver market by end-user can be segmented into Telecommunication, Datacenters and Enterprises. The datacenters'
segment by end-user in the Optical
Transceiver Market is expected to grow the fastest
at an estimated CAGR of 15.8% during the forecast period 2022-2027. In data centers,
optical transceivers are utilized to send and receive optical communications. The hierarchical Ethernet networks are still in use there. These networks
could be hybrid, fiber-based or copper-based (copper-fiber). It might not be
feasible to upgrade all devices to fiber-based components in the current
infrastructure. In some circumstances, optical transceivers are used to
transform an electric signal into an optical signal. Fiber optic cables are
used to transmit these signals further. The transceivers are made up of pairs
of transmitters and receivers that are crucial to the reverse conversion of
signals and electro-optical conversion. Multiple copper-fiber links and
numerous optical transceivers are used in high-capacity data centers. In July 2022, Lightwave Online stated that the Indonesian internet
exchange PT AbhinawaSumberdaya Asia would acquire Smartoptics' DCP-M open line
system and pluggable 100G transceivers. The hub connects OTT content creators
with Indonesia's 250 million internet consumers. The country is made up of many
islands. Thus, long-range DWDM capabilities are necessary to meet the demands of the
consumer. The DCP-M provided the easiest provisioning with the implementation
of DWDM. Smart optics stood out by being able to move high-density traffic
quickly. Smart optics has a small form factor, plug-and-play installation and
the hardware is 4 Tbps capable. The technologies also provide a path for 400G
optics upgrade, enabling the internet exchange to accommodate changing demands.
Abhinawa provides routing services to OTT service providers in Indonesia via
the idEX internet exchange point in Jakarta. Abhinawa would offer optical
technology-based data center connectivity with the use of advanced technology to
meet the increasing demand. All the above factors are driving the Optical
Transceiver market size.
Optical Transceiver Market Segment Analysis - by Geography
The Optical Transceiver market by geography is divided into North America, South America, Europe, APAC and RoW. The Asia-Pacific by region is expected to grow the fastest at an estimated CAGR of 16.8% in the Optical Transceiver Market during the forecast period 2022-2027. Some of the factors boosting the optical transceiver market in APAC are the rising usage of smart devices, a rise in internet users, increased connectivity, expanding network infrastructure and a rise in high bandwidth-intensive applications. APAC has transformed into a global center for significant investments and corporate growth. China, Japan, South Korea and several other nations have already deployed 5G mobile technologies commercially as of 2020, demonstrating that Asian markets support the development of such technologies. Additionally, APAC is a major manufacturer and seller of electronics items, including smartphones, wearable technology, home assistants, laptops and personal computers. For internet connectivity, the transceivers are either utilized as an extension or in conjunction with these electronic products. All these factors are driving the growth of the Optical Transceiver industry. In July 2022, CISION PR Newswire stated that Quantifi Photonics, a rising star in high-density photonics test and measurement, received US$15 million from a fully subscribed Series C capital raise. The fund would be used by Quantifi Photonics to provide fully integrated test systems for silicon photonics, co-packaged optical devices and optical transceivers that are transitioning from R&D labs to high-volume production lines. New high-density test solutions from Quantifi Photonics, like their 288-channel optical power meter unveiled at OFC 2022 recently, are generating considerable interest. The business primarily develops these products for producers of next-generation optical transceivers and co-packaged optical devices that employ a truly massive number of parallel channels to transport data at rates of up to 52 terabits per second. The manufacturers of datacom and telecom equipment would also be capable of developing high-density test solutions more quickly as a result of the most recent investment, which is crucial for accelerating the shift to 800G. All the above factors would drive the growth of the Optical Transceiver market size.
Optical Transceiver Market Drivers
The market of optical transceivers is being driven by the development of telecom infrastructure in developing nations:
The development of Optical Transceiver-induced fiber optical networks has made it possible to communicate between cities with high bandwidth and low latency. Developing nations like China and South Korea have already modernized their network infrastructure by deploying cutting-edge communication networks throughout their territories. The 5G network, which calls for high-bandwidth oriented fiber optic cable connections integrated with optical transceivers for safe and dependable data transfers, is being implemented in nations like India and Indonesia. All these factors are driving the market growth. In July 2022, Antara News stated that the Minister of Communication and Informatics, Johnny G. Plate, who announced the news at the opening of Indonesia's G20 Digital Economy Working Group's third meeting in Labuan Bajo, the Palapa Ring fiber-optic network was being built. The Palapa Ring fiber optic network, which spans over 12,100 km of land and sea and connects all fiber optic nodes, was built to facilitate the development of upstream digital infrastructure. In the Optical Transceiver industry outlook, the above factors are expanding the Optical Transceiver market share.
The adaptive characteristics, design simplicity and superior performance of optical transceivers have a significant impact on the market expansion:
The Optical Transceivers can support a wide range of technologies, including
Ethernet, Fibre Channel, InfiniBand, SONET/SDH/OTN, CPRI, OIF, and PON. The
optical transceivers function at the required data rates. By leveraging a wide
range of internally designed and fabricated optical components like 850 nm
VCSELs, DFB lasers, EML lasers, wavelength-tenable lasers, and coherent
photonic integrated circuits, they are capable of distances ranging from very
short reach within a datacentre to campus, access, metro and long-haul
reaches. While reducing jitter, electromagnetic interference (EMI) and power
consumption, the optical transceiver also exhibits excellent performance over
wide voltage and temperature ranges. All the above factors are driving the
market growth. In June 2022, Light reading stated that the first 100ZR pluggable coherent transceiver was released by II-VI
Incorporated, a leader in optical transceivers, and ADVA, a leader in open
optical networking solutions. The coherent 100ZR transceiver was jointly
developed and specifically designed for the optical network edge, and it is
qualified for both commercial & industrial temperature (C-temp and I-temp)
operating ranges. The Steelerton coherent digital signal processor (DSP) is a
feature of the new 100ZR digital coherent optics (DCO) transceiver. This
brand-new DSP (digital signal processor) is fully unique and was co-funded by
both companies. Service providers can now simply and economically implement 100
Gbps coherent transceiver technology in the access network with the new coherent
100ZR transceiver. A coherent DSP (digital signal processor) optimized for
100ZR, cost-effective silicon photonics technology, a common QSFP28 interface and Flextune technology are some of these transceivers' unique features. All
these factors are driving the growth of the Optical Transceiver
industry.
The Optical Transceiver Industry is expanding due to the fusion of cutting-edge technology with optical transceiver technologies:
The integration of space optical communication with terrestrial optical fiber communications by the companies to have better communication and detection processes is also driving the Optical Transceiver market growth. In June 2022, according to Photonics, a prototype optical receiver for use in laser communication terminals was created by Mitsubishi Electric Corp. (LCTs) one of the top 10 companies in the Optical Transceiver market. According to the manufacturer, the 1.5-m band, a general-purpose band used for terrestrial optical fiber communications and other applications, is the first band to integrate a function to detect the direction of received beams and space optical communication employing laser beams. To enable space optical communication with 10 times the speed, capacity and range of radio-wave transmission, the optical receiver incorporates features to detect the four phase shifts of laser light as well as beam direction. The new technology installations are feasible in places without standard infrastructure, including disaster zones, developing nations or rural regions, broadening the usage of wireless communications in a broad range of situations. All these factors are driving the growth of the Optical Transceiver market share.
Optical Transceiver Market Challenges:
The rising need for bandwidth connections with advanced technologies may limit the growth of the optical transceiver industry:
The need for data in society is expanding and there is a constant demand for bandwidth. Social networking services, big data, and emerging technologies like artificial intelligence (AI), 5G, machine learning, linked autos and autonomous driverless vehicles are all contributing to the over 50% annual growth in network capacities. The demand for more data that is delivered more quickly as a result of these advancements has increased, which is restricting market growth. The optical transceivers are not yet capable of meeting such massive demands over a wide range of distances. These factors act as a barrier to market growth. In November 2020, Electronics360 Globalspecs stated that the main drawback of PAM4-based technology was that it required optical dispersion compensation systems on the optical link to reach longer than 5 kilometers (km) if it fell into conventional C-band wavelengths within a 1550 nm window. This made it difficult to meet the need for increased bandwidth connection (far away from zero-dispersion wavelength). When you use standard single-mode fiber and operate at O-band wavelengths within a 1310 nm window (near the zero-dispersion area), this distance converts to more than 40km (SMF). Performance has deteriorated in long-distance coverage, where signal quality distortion and information loss have been observed. All the above factors are restricting the market growth.
The Ethernet protocol due to its limitations in services can act as a barrier to market growth:
The Ethernet protocol is used to link multiple devices to LAN
networks, but it also has many restrictions. The Ethernet switch is unsuitable
for real-time applications because deterministic service is needed. Since
performance is negatively correlated with traffic, it is ineffective for
applications that generate a lot of traffic. If there are any problems with the
Ethernet switch, it is impossible to fix the specific cable or node. All these
factors are acting as a barrier to market growth. In April 2022, Nextplatfromstated
that Google gave up on Ethernet switches in favor of Aquila to compete with InfiniBand.
Aquila is a new distributed switching architecture that Google has developed
along with a new GNet protocol stack in response to the problems faced due to
the shortcomings of Ethernet switches. The search engine giant has been looking
for consistency and low latency for decades and has taken the best ideas from
InfiniBand and Cray's "Aries" interconnect. In the Optical Transceiver
industry outlook, the above factors would restrict the
market growth.
Optical Transceiver Market Landscape
Product launches, collaborations, and R&D activities are key strategies adopted by players in the Industrial Lighting market. The top 10 companies in the Optical Transceiver market are:
- Arista Networks Inc.
- Broadcom Inc.
- Cisco Systems, Inc.
- Fujitsu Optical Components Limited
- Huawei Technologies Co. Ltd.
- Juniper Networks Inc.
- Lumentum Operations LLC
- NEC Corporation
- Sumitomo Electric Industries Ltd
- ZTE Corporation
Recent Developments
- In July 2022, Research Gate stated in their Optical Transceiver market report that an optical transceiver formed onto a conventional low-cost printed circuit board with integrated optical waveguides is presented. The transceiver incorporates an optical multimode polymer Y-splitter formed directly on a low-cost single-layered FR4 substrate enabling duplex transmission along a single optical fiber.
- In June 2022, Forbes reported that Intel Labs announced the successful construction of an eight-wavelength, distributed feedback (DFB) laser array on a chip. The chip delivers excellent output power and wavelength spacing uniformity that exceed industry specifications for optical laser communications modules.
- In March 2022, Lightwaveonline mentioned in their Optical Transceiver market report that two new 400G QSFP-DD coherent pluggable optical transceivers have been introduced by Acacia, which is now a part of Cisco, one of the Optical Transceiver top 10 companies. The new optical modules include the Bright 400ZR+ and a coherent 400G ER1 device, both of which are based on Acacia's Greylock 7-nm DSP.
- In March 2022, VentureBeat stated in their Optical Transceiver market report that Ranovus has introduced and demonstrated a co-packaged optics platform called Analog-Drive CPO 2.0 based on its Odin 800 Gbps architecture.
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