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The optical interconnect market share is expected to increase to USD 9.66 billion from 2021 to 2026, at a CAGR of 13.67%.
This optical interconnect market research report provides valuable insights on the post COVID-19 impact on the market, which will help companies evaluate their business approaches. Furthermore, this report extensively covers optical interconnect market segmentation by fiber type (single-mode fiber and multimode fiber), connectivity (rack level, long-haul level, and chip and board level), product type (optical transceivers, connectors, cable assemblies, and others), and geography (APAC, North America, Europe, South America, and Middle East and Africa). The optical interconnect market report also offers information on several market vendors, including 3M Co., Amphenol Corp., Cisco Systems Inc., Corning Inc., FIBERONE LLC, Fischer Connectors Holding SA, Fujikura Ltd., Fujitsu Ltd., Furukawa Electric Co. Ltd., II VI Inc., InnoLight Technology Ltd., Japan Aviation Electronics Industry Ltd., Lumentum Holdings Inc., Molex LLC, NINGBO LONGXING TELECOMMUNICATIONS EQUIPMENT MANUFACTURING CO. LTD., NVIDIA Corp., Radiall SA, Sterlite Technologies Ltd., Sumitomo Electric Industries Ltd., and TE Connectivity Ltd. among others.
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The adoption of cloud database is notably driving the optical interconnect market growth, although factors such as high cost of optical interconnectors may impede market growth. Our research analysts have studied the historical data and deduced the key market drivers and the COVID-19 pandemic impact on the optical interconnect industry. The holistic analysis of the drivers will help in deducing end goals and refining marketing strategies to gain a competitive edge.
Key Optical Interconnect Market Driver
One of the key factors driving the global optical interconnect industry growth is the adoption of cloud database. Commercial enterprises require very high storage capacity and need to access information and data from any location. Many enterprises use cloud-based storage services such as AWS, Amazon Cloud Drive, Bit Torrent Sync, Box, Cubby, Dropbox, and Google Drive. Optical interconnect is a feasible replacement for some networking infrastructure because of the advantages mentioned below.
The cloud-based services such as PaaS and SaaS have created a huge demand for fiber optical interconnects. As the global spending by enterprises on cloud storage increases, it will also boost the demand for fiber optical interconnect for cloud-based applications in the forecast years.
Key Optical Interconnect Market Trend
Demand for millimeter wave connectivity is one of the key optical interconnects market trends that is expected to impact the industry positively in the forecast period. Wireless backhaul traffic can be classified into two typical network architectures by adopting small cell and millimeter-wave. The data transmission demand is increasing at a rapid pace, which is propelling the demand for high bandwidth applications. In addition, optical interconnect is used to connect millimeter wave connectivity, which is extensively used in the small cell backhaul network. Upcoming 5G technology holds huge growth opportunities for the millimeter-wave market. Millimeter-wave connectivity is economical and highly energy-efficient for deploying the future 5G network, which will further support the market growth in the coming years.
Key Optical Interconnect Market Challenge
One of the key challenges to the global optical interconnect industry growth is the high cost of optical interconnectors. The average selling price of an interconnector ranges from $100 to $600 depending on the number of applications, the package weight, bandwidth, split ratios available, custom wavelength, coupling ratio, sample rate, and several channels. The ASP of an interconnector supporting bandwidths up to plus-minus 200 nm and center wavelength up to 2,000 nm is very high. The interconnectors have the capability to debug standard cables such as universal serial bus (USB), coaxial, and Ethernet cables. The high ASP of the interconnector may limit tits demand in the forecast years.
This optical interconnect market analysis report also provides detailed information on other upcoming trends and challenges that will have a far-reaching effect on the market growth. The actionable insights on the trends and challenges will help companies evaluate and develop growth strategies for 2022-2026.
Technavio categorizes the global optical interconnect market as a part of the global technology hardware, storage, and peripherals market. Our research report has extensively covered external factors influencing the parent market growth potential in the coming years, which will determine the levels of growth of the optical interconnect market during the forecast period.
The report analyzes the market's competitive landscape and offers information on several market vendors, including:
This statistical study of the optical interconnect market encompasses successful business strategies deployed by the key vendors. The optical interconnect market is fragmented and the vendors are deploying growth strategies such as technological innovation to compete in the market.
To make the most of the opportunities and recover from post COVID-19 impact, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.
The optical interconnect market forecast report offers in-depth insights into key vendor profiles. The profiles include information on the production, sustainability, and prospects of the leading companies.
Our report provides extensive information on the value chain analysis for the optical interconnect market, which vendors can leverage to gain a competitive advantage during the forecast period. The end-to-end understanding of the value chain is essential in profit margin optimization and evaluation of business strategies. The data available in our value chain analysis segment can help vendors drive costs and enhance customer services during the forecast period.
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63% of the market's growth will originate from APAC during the forecast period. China, South Korea, and Japan are the key markets for optical interconnect in APAC. Market growth in this region will be faster than the growth of the market in North America, Europe, and MEA.
The increase in interest of Indian and Chinese governments in deploying fiber optics for communication, a growing number of telecom subscribers in APAC, and rising demand for data centers will facilitate the optical interconnect market growth in APAC over the forecast period. This market research report entails detailed information on the competitive intelligence, marketing gaps, and regional opportunities in store for vendors, which will assist in creating efficient business plans.
COVID Impact and Recovery Analysis
The COVID-19 outbreak in APAC has affected several countries in the region, including China, India, South Korea, and Japan. The pandemic affected the overall economy of the APAC region, as well as supply chains and the operations of the industrial and telecommunication sectors. However, since Q4 2020, several companies, including telecommunication providers, have been adopting cloud-based storage solutions and next-generation telecommunication solutions with increased data centers. All these factors positively impacted the regional market growth. During the forecast period, a rise in data center investment in India, China, and South Korea will further fuel the regional market growth.
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The optical interconnect market share growth by the single-mode optical fibers segment will be significant during the forecast period. The growth can be attributed to specialized applications such as illumination, imaging, medical cases, and telemetry. In addition, short-distance data centers used by government agencies and enterprises use single-mode fiber-optic interconnects.
This report provides an accurate prediction of the contribution of all the segments to the growth of the optical interconnect market size and actionable market insights on post COVID-19 impact on each segment.
Optical Interconnect Market Scope |
|
Report Coverage |
Details |
Page number |
120 |
Base year |
2021 |
Forecast period |
2022-2026 |
Growth momentum & CAGR |
Decelerate at a CAGR of 13.67% |
Market growth 2022-2026 |
$ 9.66 billion |
Market structure |
Fragmented |
YoY growth (%) |
17.95 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 63% |
Key consumer countries |
US, Canada, China, South Korea, and Japan |
Competitive landscape |
Leading companies, Competitive strategies, Consumer engagement scope |
Key companies profiled |
3M Co., Amphenol Corp., Cisco Systems Inc., Corning Inc., FIBERONE LLC, Fischer Connectors Holding SA, Fujikura Ltd., Fujitsu Ltd., Furukawa Electric Co. Ltd., II VI Inc., InnoLight Technology Ltd., Japan Aviation Electronics Industry Ltd., Lumentum Holdings Inc., Molex LLC, NINGBO LONGXING TELECOMMUNICATIONS EQUIPMENT MANUFACTURING CO. LTD., NVIDIA Corp., Radiall SA, Sterlite Technologies Ltd., Sumitomo Electric Industries Ltd., and TE Connectivity Ltd. |
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, Market condition analysis for 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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