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The quad small form-factor pluggable (QSFP) module market is estimated to grow at a CAGR of 9.6% between 2022 and 2027. The size of the market is forecast to increase by USD 1,122.7 million. The growth of the market depends on several factors, including the rising optical fibre communication network connections, the increase in global Internet traffic, and the emergence of IoT.
This report extensively covers market segmentation by application (data communication and telecommunication), end-user (IT and telecommunication, automotive, healthcare, oil and gas, and others), and geography (APAC, North America, Europe, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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Technavio categorizes the global quad small form-factor pluggable (QSFP) module market as a part of the global electrical components and equipment market. The parent market, the global electrical components and equipment market, covers companies engaged in the manufacturing of electric cables and wires, electrical components, and electrical equipment. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
Rising optical fiber communication network connections are notably driving the quad small form-factor pluggable (QSFP) module market growth, although factors such as the high cost of QSFP transceiver modules may impede the market growth. Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market.
Key Quad Small Form-Factor Pluggable (QSFP) Module Market Driver
Rising optical fiber communication network connections are notably driving the quad small form-factor pluggable (QSFP) module market growth. Optical fibers are flexible, thin, susceptible to electromagnetic interference, and more rugged and reliable than copper cables. They are corrosion-free, present no fire hazard, and can carry signals over long distances with minimal breakdown, unlike copper cables. These characteristics of optical fiber are encouraging several industry players from different industry verticals, such as military and aerospace, mining, oil and gas, telecommunication, transportation, and utilities, to build their communication network infrastructure using fiber optics.
The fibre-to-the-premises (FTTP) initiatives undertaken by different countries are driving the demand for optical fiber and optical fiber components for FTTx connections. The FTTH network uses fiber optic cables instead of copper, telephone, or other cables to deliver high-speed service to the above end-user facilities. Therefore, the increased penetration of FTTH across the world is expected to drive the growth of the quad small form-factor pluggable (QSFP) module market during the forecast period.
Key Quad Small Form-Factor Pluggable (QSFP) Module Market Trend
Migration to 40 Gbps and 100 Gbps data centers is a key trend influencing the quad small form-factor pluggable (QSFP) module market growth. With the emergence of M2M communication, IoT applications are generating massive volumes of new data. All this data has to be stored, managed, and retrieved between data centers located around the world. Advanced enterprise applications and server virtualization that require higher data transport rates are compelling data centers to migrate from 10 Gbps speed to 40 and 100 Gbps speed.
One way to achieve this is to deploy 40 Gbps and100 Gbps quad small form-factor pluggable (QSFP) transceiver modules that allow the reuse of the existing 10-Gbps Ethernet/optical fiber infrastructure for 40 Gbps and 100 Gbps connections. The increasing shift from 1 Gbps to 5 Gbps to support higher bandwidth access points will further drive the migration to high Gbps speed. Data centers will migrate from 10 Gbps to 100 Gbps for both enterprises and cloud providers. These factors are driving the demand for QSFP modules such as 40 Gbps and 100 Gbps QSFP modules, which, in turn, will support the quad small form-factor pluggable (QSFP) module market growth.
Key Quad Small Form-Factor Pluggable (QSFP) Module Market Challenge
The high cost of QSFP transceiver modules may impede the quad small form-factor pluggable (QSFP) module market growth. Service providers are migrating to 40 Gbps and 100 Gbps speeds because of the increase in Internet IP traffic. The high average selling price of QSFP modules and the deployment of new optical equipment that is not suitable for 40/100G networks present a major cost challenge.
The price of 40 Gbps and 100 Gbps QSFP modules is very high, while the price of four 10G SPF modules, which can be used for supporting 40 Gbps speed, is lower. Therefore, we expect that the high cost of QSFP modules is adversely affecting their adoption. Thus, the high cost of QSFP modules is likely to act as a challenge to the growth of the quad small form-factor pluggable (QSFP) module market during the forecast.
Key Quad Small Form-Factor Pluggable (QSFP) Module Market Customer Landscape
Our analysis of the lifecycle of the quad small form-factor pluggable module market indicates a movement from the innovator’s stage to the laggard’s stage. The report illustrates the lifecycle of the market, focusing on the adoption rates of the major countries including the US, China, South Korea, Japan, and Germany. Technavio has included key purchase criteria, adoption rates, adoption lifecycles, and drivers of price sensitivity to help companies evaluate and develop growth strategies from 2022 to 2027.
Global Quad Small Form-Factor Pluggable (QSFP) Module Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the quad small form-factor pluggable module market.
Amphenol-cs - The company offers QSFP modules such as 400G ZR/ZR QSF DD DCO. The organization is also known to provide interconnect solutions to the mobile networks market and offers a wide product portfolio, including antennas, connectors, and others.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the data communication segment will be significant during the forecast period. Data communication refers to the transmission and receipt of data between the source and receiver, but not the actual generation of the information at the source and receiver. A data communication system collects data from a remote location and outputs the processed data to a remote location. The physical medium through which the data is sent can be coaxial cables, microwaves, optical fiber, twisted pairs, or radio waves.
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The data communication segment showed a gradual increase in the market share with USD 705.22 million in 2017 and continued to grow by 2021. Increasing bandwidth requirements in data centers are driving the demand for QSFP modules in the data communication segment. Service providers are migrating from 10 Gbps to 40 Gbps and 100 Gbps speeds. Many large enterprise data centers and government data centers are making the transition from 10 GbE switching ports to 40/100 GbE due to the exponential growth in business demands. The increased deployments of multicore processor-based servers and virtualized servers that help run multiple application workloads on a single server, infrastructure convergence, and mission-critical and high-traffic applications are increasing the need for high-bandwidth networking infrastructure, namely 10/40 Gbps QSFP modules. Furthermore, our report provides a brief analysis of the historical and forecast market share and their segments along with the reasons for growth from 2017 to 2027.
The growth of this segment is primarily attributed to the increasing adoption of QSFP modules, which is driven by an increase in the global demand for QSFP modules.
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North America is projected to contribute 39% of the market's growth by 2027. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the QSFP module market during the forecast period.
In North America, the US leads the spending on data centers. Investments in data center construction have grown, with additional investments in renewable energy sources for data center operations. Most data centers operating in the US are owned by global CSPs, colocation and managed hosting service vendors and telecommunication organizations. New product launches by key vendors in the region are likely to drive the growth of the market. For instance, in September 2022, Marvell Technology, Inc. announced the launch of its 100G QSFP-DD optical module portfolio for 5G backhaul and aggregation for high-density 200Gbps and 400Gbps applications in collaboration with Innolight Technology Corporation. Such innovations are expected to fuel the demand for transceivers, prompting the growth of the QSFP module market during the forecast period.
This report forecasts the contribution of all the segments to the growth of the market. In addition, we have included the COVID-19 impact and the recovery strategies for each segment. The COVID-19 pandemic positively impacted the growth of the quad small form-factor pluggable (QSFP) module market in North America in 2020. Owing to the pandemic, governments in countries including the US, Canada, and Mexico, imposed stringent lockdowns. As a result, industries in North America were forced to undertake numerous trade activities online, leading to the widespread use of virtual private networks (VPNs) for remote work and teleconferencing. In addition, with the increase in usage of the Internet, the need for technologies such as big data, machine learning, and other sophisticated technologies to process large amounts of data increased in 2020. This, in turn, fueled the demand for compact, hot-pluggable transceiver modules for seamless data communications, leveraging further the growth of the quad small form-factor pluggable (QSFP) module market in North America in 2020. Moreover, the easing of lockdowns and large-scale vaccination drives in North America, coupled with increased funding for the expansion of 5G technology and the development of data centers in 2021, will propel the gradual growth of the quad small form-factor pluggable (QSFP) module market in North America during the forecast period.
Our report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by application, end-user, and region.
Quad Small Form-Factor Pluggable (QSFP) Module Market Scope |
|
Report Coverage |
Details |
Page number |
174 |
Base year |
2022 |
Historical year |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 9.6% |
Market growth 2023-2027 |
USD 1,122.7 million |
Market structure |
Fragmented |
YoY growth (%) |
9.3 |
Regional analysis |
North America, APAC, Europe, South America, and the Middle East and Africa |
Performing market contribution |
North America at 39% |
Key consumer countries |
US, China, South Korea, Japan, and Germany |
Competitive landscape |
Leading companies, Competitive Strategies, Consumer engagement scope |
Key companies profiled |
Amphenol Communications Solutions, Arista Networks Inc., Broadcom Inc., Cisco Systems Inc., Coherent Corp., Corning Inc., Dell Technologies Inc., Foxconn Interconnect Technology Ltd., Fujitsu Ltd., Hitachi Ltd., Huawei Technologies Co. Ltd., InnoLight Technology Ltd., Intel Corp., Lumentum Holdings Inc., Molex LLC, NVIDIA Corp., Semtech Corp., Sumitomo Electric Industries Ltd., and TTI Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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