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The optical modulators market is estimated to grow at a CAGR of 6.65% between 2022 and 2027. The size of the market is forecast to increase by USD 9,519.57 million. The growth of the market depends on several factors, including growing demand for fiber-coupled integrated optical modulators, increasing demand for cloud-based storage, and growing demand for optic fibers.
This report extensively covers market segmentation by type (10 to 40 Gbps, 40 Gbps and above, and less than 10 Gbps), application (telecommunications, data centers, CATV, 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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The growing demand for optic fibers is notably driving the market growth, although factors such as the high operating costs for managing optical modulators may impede the market growth. Our researchers analyzed the data with 2022 as the base year and the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Key Optical Modulators Market Driver
The growing demand for optic fibers is notably driving the market growth. Optic fiber uses light waves for data and voice transmission. The data transmission capacity of optic fibers is 4.5 times more than that of copper cables. Optic fiber cables are superior in quality compared with traditional copper coaxial cable or twisted-pair cable, owing to their physical characteristics. Moreover, these cables allow data to travel at speeds close to the speed of light. Additionally, optic fibers have low signal attenuation, which allows them to transfer a signal to long distances without a repeater or amplifier. These factors will encourage enterprises in industries, such as telecommunications, to opt for optic fibers.
One of the most notable factors driving the demand for optic fibers is the rapidly increasing internet traffic globally. The growing demand for mobile devices is leading to an increase in the number of internet users. Moreover, the emergence of technologies, such as Long-Term Evolution and fiber to the x (FTTX), which require last-mile connectivity, is expected to drive the demand for optic fibers. Optical modulators are used to modulate a beam of light in an optic fiber. Thus, such factors are expected to boost the global electro-optic modulators market growth during the forecast period.
Significant Optical Modulators Market Trend
The growing use of optical modulators in smart homes is an emerging trend in the electro-optic modulators market. A smart home comprises a communication network that connects different appliances and allows them to be monitored, controlled, and accessed remotely. In smart homes, devices that use electricity can be connected to the home network and can be controlled using commands through remote control, voice, or smartphone. Most applications in smart homes are related to home security, lighting, and thermostat regulation. Globally, the number of smart homes is expected to grow rapidly during the forecast period.
Some of these smart homes comprise fibre-to-home connection, which includes optical modulators. These modulators offer high-bandwidth signals for long distances using light waves, which leads to fewer interruptions in internet access and higher stability. Moreover, optical modulators are scalable and have unlimited bandwidth capacity, which helps in supporting a considerable amount of data. The benefits associated with the use of optical modulators in smart homes are encouraging vendors to offer optical modulators for smart homes. Therefore, the growth in the number of smart homes is expected to drive the growth of the global market during the forecast period.
Major Optical Modulators Market Challenge
The high operating cost of managing optical modulators is a major challenge impeding the market. The market for optical modulators is registering a high growth rate, led by an increase in the number of installations and investments. Therefore, the demand for a skilled workforce is increasing. This workforce must be well-updated with the latest related technologies. Earlier, enterprises in relevant industries, such as CATV, used copper cables instead of optical cables. Therefore, educating or training the workforce was not mandatory. However, with the emergence of optical fibers, enterprises need to train their workforce, which leads to an increase in the operating cost of enterprises, thereby impacting their profit margins.
Furthermore, enterprises in industries such as telecommunications and data centers are deploying optical cables, which have optical modulators, beneath the ocean surface. It is difficult for enterprises to maintain deployed cables in such scenarios. If optical cables get damaged under the sea, enterprises must locate the fault and replace the cable. This leads to an increase in the operating cost for enterprises. Hence, such factors will hinder the growth of the global market during the forecast period.
Key Optical Modulators Market Customer Landscape
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Optical Modulators 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 market.
Agiltron Inc. - The company offers various products such as optical fiber, switches, and others. The key offerings of the company include free-space high-speed modulators and fiber-coupled high-speed modulators.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 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 10 to 40 Gbps segment will be significant during the forecast period. These devices are designed to produce a good trade-off between high efficiency, speed, and minimal optical loss. They rely on the carrier depletion effect in a pipin diode.
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The 10 to 40 Gbps segment was valued at USD 11,379.76 million in 2017 and continued to grow until 2021. High energy-efficient 10-40 Gbps optical modulator and receiver circuits are manufactured with 40-nm technology. When linked to an external silicon photonic ring modulator, the transmitter uses 135 fJ/b. When linked to an external photodiode, the receiver uses 395 fJ/b at a sensitivity level of -15 dBm. The silicon optical modulator, which powers optical interconnects to produce high-performance data lines, is one of the most important parts of a high-speed integrated photonic system. These optical modulators have an extinction ratio (ER) of 3.2 dB to 6.6 dB, respectively, and operate at a rate of 40 Gbit/s. 40 GHz high-speed LiNbO3 optical modulators are available in two newly designed types, namely, a back slot type and a ridge type. LiNbO3 optical modulators feature high speed and low-switching voltage. These formats have been converted to the optical domain from electrical modulation techniques, resulting in intricate devices and modes of operation. The increasing adoption of 10-40 Gbps optical modulators is expected to drive the growth of the 10-40 Gbps segment of the global market during the forecast period.
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APAC is estimated to contribute 55% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The market for optical modulators is expected to grow in APAC, driven by the growth of the telecommunications industry. Established international players in the telecommunications industry are expanding their global footprint by entering the mobility space in Asia. Moreover, increasing investments in the 5G network in the region will support the growth of the market. Optical modulators will help enterprises in the telecommunications industry to transmit a wide bandwidth of signals with low latency. It will also help in transmitting medium-to-long-distance signals with a high data transmission rate. Thus, with the growth of the telecommunications industry in the region, the demand for optical modulators is expected to increase during the forecast period.
Furthermore, the CATV industry is growing in this region, led by an increase in digital pay-TV subscriptions, including satellite, cable, and internet Protocol television (IPTV), despite the continued growth of over-the-top (OTT) subscription video services, such as Netflix Inc. (Netflix), Hulu LLC, and Amazon Prime Video. The CATV industry growth in APAC is primarily driven by the Internet Protocol television market growth in China. Owing to the increased demand for CATV in the region, various OTT providers are investing in the CATV market to strengthen their market presence. Optical modulators will help enterprises in increasing the transmission distance for a point-to-point link compared with traditional transmitters. Thus, such factors will drive regional market growth during the forecast period.
The rising threat of transmission of COVID-19 led to the imposition of a complete lockdown in the region in 2020, which affected the market in the region. However, in 2021, the mass COVID-19 vaccination drives conducted in the region and other government initiatives resulted in the removal of the lockdown restrictions and the resumption of business operations in the global market. This further led to the resumption of optical modulator manufacturing across the globe. The resumption of the telecommunications industry projects and investments in new data centers are expected to increase the demand for optical modulators. Such factors are expected to boost the growth of the regional market during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
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Optical Modulators Market Scope |
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Report Coverage |
Details |
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Page number |
174 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.65% |
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Market growth 2023-2027 |
USD 9,519.57 million |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
5.55 |
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Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
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Performing market contribution |
APAC at 55% |
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Key countries |
US, Japan, China, Taiwan, and Germany |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
AA Opto Electronic, AC Photonics Inc., Agiltron Inc., APE Angewandte Physik und Elektronik GmbH, Cisco Systems Inc., Conoptics Inc., Excelitas Technologies Corp., Fujikura Co. Ltd., Gooch and Housego Plc, Hamamatsu Photonics KK, Intel Corp., International Business Machines Corp., Jenoptik AG, Lightwave Logic Inc., Lumentum Holdings Inc., MKS Instruments Inc., Qorvo Inc., Schafter Kirchhoff GmbH, Thorlabs Inc., and Timbercon Inc. |
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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. |
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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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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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