Optical Interconnect Market

Global Optical Interconnect Market Size (2023 to 2028)

The global optical interconnect market size is expected to be worth USD 11.63 Billion in 2023. It is expected to grow at a CAGR of 13.7% during the forecast period and reach a value of USD 22.10 Billion by 2028.

An optical interconnect is a system that transmits signals from one part of an integrated circuit to another using light. These interconnects are a crucial topic of study because of the high latency and power consumption that was induced by conventional metal interconnects in transmitting electrical signals across long distances like interconnects that are classed as global interconnects.

MARKET DRIVERS:

The growth of the global optical interconnect market is majorly driven by the rising adoption of cloud databases all around the world. Moreover, cloud-based storage services like storage-as-a-service (SaaS) and platform-as-a-service (PaaS) offer enhanced scalability by expertly handling and storing complex data for later usage. Whereas these cloud service providers are adopting the developed equipment, which includes optical interconnects for serving high storage capabilities and processing speed, this implementation of optical interconnects in the networking infrastructure is cost-effective, too, owing to the lower power consumption.

The growing demand for advanced bandwidth requirements is the major factor that was driving the growth of the global optical interconnect market. Also, the better functions that these optical interconnects offer when compared to traditional interconnects which are copper-based and the growing bandwidth capacity coupled with the reduced power consumption within data center networks are the factors that will be boosting the growth of the target market over the forecast period. Further, rising network traffic, which is resulting in higher demand for optical interconnect devices for sustaining in the future coupled with the other web applications in cloud computing, are the other factors that are pushing the optical interconnect market's growth.

Nonetheless, growing optical interconnect technologies application areas in the automation sector to handle network tasks that are already done manually are creating lucrative opportunities for the expansion of the players in the global optical interconnect market.

MARKET RESTRAINTS:

However, network connections in long-distance traffic, and loss at high frequencies in electrical lines & fiber optic cables, which are quite high to some extent, are the major restraints that are hampering the growth of the optical interconnect market.

Impact of COVID-19 on the optical interconnect market:

The effect of the COVID-19 pandemic on the global optical interconnect market is very negative. The most affected segment in the market was the utility-owned optical interconnects, which are basically driven by growing financial incentives and regulatory support from governments all over the world. It is because of the current situation around the globe, such as projects in China, the US, Germany, and South Korea getting delayed, and the companies facing short-term operational issues owing to the effect of the pandemic on the supply chain.

REPORT COVERAGE:

This research report on the global optical interconnect market has been segmented and sub-segmented into the following categories.

Global Optical Interconnect Market – By Category Type of Product:

• Cable Assemblies
  • Indoor Cable Assemblies
  • Outdoor Cable Assemblies
  • Active Optical Cables
  • Multi-source Agreements
• Connectors
  • LC Connectors
  • SC Connectors
  • ST Connectors
  • MPO/MTO Connectors
• Optical Transceivers
• Free Space Optics
• Fiber & Waveguides
• Silicon Photonics
• PIC-based Interconnects
• Optical Engines

Global Optical Interconnect Market – By Interconnect Level Outlook:

• Metro and Long-haul Optical Interconnect
• Board-to-board and rack-level Optical Interconnect
• Chip- and board-level Optical Interconnect

Global Optical Interconnect Market – By Fiber Mode:

• Single Mode Fiber
• Multimode Fiber

Global Optical Interconnect Market – By Data Rate Segmentation:

• Less than 10 Gbps
• 10 Gbps to 40 Gbps
• 41 Gbps to 100 Gbps
• More than 100 Gbps

Global Optical Interconnect Market – By Distance Outlook:

• Less than 1 km
• 1 km to 10 km
• 11 km to 100 km
• More than 100 km

Global Optical Interconnect Market – By Application Outlook:

• Data Communication
• Telecommunication

Global Optical Interconnect Market – By Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

In the regional analysis of the global optical interconnect market, North America held the major share of the market in terms of revenue. The major factor that was driving the growth of the target market in this area was the huge internet penetration that resulted in higher usage of data center networks owing to the extensive utilization of these interconnects for network management. Moreover, the presence of huge internet-based businesses in this region such as Facebook and Google, among others, is another key growth factor that was driving the North American optical internet market.

The Asia-Pacific Optical Interconnect Market is expected to witness rapid growth during the outlook period. The major factor that is driving the growth of the target market in the Asia-Pacific region is rising internet penetration as well as the growing technological developments in countries such as China, Japan, South Korea, and India, which are major growing countries.

KEY MARKET PLAYERS:

The key players in the global optical interconnect market include II-VI Incorporated (US), Lumentum Operations LLC (US), Molex, LLC (US), InnoLight Technology (Suzhou) Ltd. (China), NVIDIA Corporation (US), Fujitsu Ltd. (Japan), Sumitomo Electric Industries, Ltd. (Japan), Broadcom Inc. (US), TE Connectivity (Switzerland), Amphenol Corporation (US), Accelink Technology Co. Ltd. (China), Juniper Networks, Inc. (US), Infinera Corporation (US), Acacia Communications, Inc. (US), NeoPhotonics Corporation (US), Optoscribe Ltd. (UK), Smiths Interconnect (UK), Cailabs (France), Fiberplex Technologies, LLC (US), and Cleerline Technology Group (US).

RECENT HAPPENINGS IN THE MARKET:

• Nvidia, one of the key players in the global optical interconnect market, has announced that it is going to acquire Mellanox, mainly for the application of AI to security and predictive maintenance applications of InfiniBand data centers.
• Keysight Technologies is going to showcase its data center interconnect test solutions at the Optical Networking Innovations Event.