Optical Modulators Market by Type, Application and Geography - Forecast and Analysis 2023-2027

Optical Modulators Market Forecast 2023-2027 

The optical modulators market is estimated to increase by USD 9.51 billion and grow at a CAGR of 6.65% between 2022 and 2027. 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. Optic fibers utilize light waves to transmit data and voice, providing a transmission capacity approximately 4.5 times greater than that of traditional copper cables. Renowned for their exceptional quality and physical attributes compared to copper coaxial or twisted-pair cables, optic fiber cables enable data to travel at speeds approaching that of light, facilitating efficient data transmission. Additionally, optic fibers demonstrate low signal attenuation, allowing signal transmission over extended distances without requiring repeaters or amplifiers. These advantages position optic fibers as the preferred choice for enterprises, particularly within the telecommunications sector.

What will be the size of the Optical Modulators Market During the Forecast Period?

To learn more about this report, Download Report Sample

Segmentation

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.

By Type

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.

Get a glance at the market contribution of various segments Request a PDF Sample

The 10 to 40 Gbps segment was valued at USD 11.38 billion 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 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 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 is expected to drive the growth of the 10-40 Gbps segment of the global market during the forecast period. 

By Regions

For more insights on the market share of various regions Request PDF Sample now!

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 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 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. They 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.

Market Dynamics and Customer Landscape

The Market is experiencing significant growth driven by advancements in optical communication technology. Optical modulators play a crucial role in manipulating light beams to carry binary signals efficiently. Leveraging the electro-optic effect, these signal-controlled components offer flexibility in modulating amplitude, phase, and polarization of optical beams. With the increasing demand for data across social media platforms and the rollout of 5G networks, the need for optical communication systems is soaring. Additionally, energy efficiency and datacenter disaggregation are further fueling the adoption of optical interconnects. As a result, the market for optical modulators is poised for substantial expansion in the coming years. 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 Market Driver

The market is experiencing significant growth, largely propelled by the growing demand for optic fibers. Optic fibers utilize light waves for the transmission of data and voice, offering a transmission capacity of approximately 4.5 times greater than that of traditional copper cables. Renowned for their superior quality and physical characteristics compared to copper coaxial or twisted-pair cables, optic fiber cables enable data to travel at speeds nearing that of light, facilitating efficient data transmission. Furthermore, optic fibers exhibit low signal attenuation, enabling signal transmission over long distances without the need for repeaters or amplifiers. These advantages make optic fibers a preferred choice for enterprises, particularly in the telecommunications sector.

The surge in internet traffic worldwide, driven by the increasing adoption of mobile devices and emerging technologies such as Long-Term Evolution (LTE) and fiber to the x (FTTX), further contributes to the demand for optic fibers. These technologies rely on optic fibers for last-mile connectivity, thereby boosting the market for optical modulators. These modulators play a crucial role in modulating a beam of light within optic fibers, facilitating efficient data transmission. With such compelling factors driving demand, the global electro-optic modulators market is poised for significant growth in the foreseeable future.

Significant Market Trend

The growing use of optical modulators in smart homes is an emerging trend in the 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 connections. These modulators offer high-bandwidth signals for long distances using light waves, which leads to fewer interruptions in internet access and higher stability. Moreover, they are scalable and have unlimited bandwidth capacity, which helps in supporting a considerable amount of data. The benefits associated with the use in smart homes are encouraging vendors 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 Market Challenge

The high operating cost is a major challenge impeding the market. The market 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 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 Market Customer Landscape

Who are the Major Optical Modulators Market Companies?

Companies 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 players, including:

• AA Opto Electronic
• AC Photonics 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.

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.

Segment Overview

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. 

• Type Outlook 
  • 10 to 40 Gbps
  • 40 Gbps and above
  • Less than 10 Gbps

• Application Outlook 
  • Telecommunications
  • Data centers
  • CATV
  • Others

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Brazil
    • Argentina

Market Analyst Overview

The market is witnessing remarkable growth propelled by advancements in fiber optic technology and the rise of 5G network technology. These developments are bolstering high-speed data transmission and broadband capacity, catering to the increasing data demand driven by cloud computing and Internet of Things (IoT) technology. Technological innovations like electro-optic and phase modulators are enhancing signal quality and frequency stabilization, ensuring efficient optical communication. Additionally, the rise of silicon photonics is opening new opportunities in the optical modulators industry, promising flexibility, energy efficiency, and high-speed communications for telecom applications and beyond. This growth trajectory is further supported by the continuous evolution of laser technology and broadband Internet.

The market is witnessing significant advancements in modulation techniques, particularly in amplitude modulation, driven by developments in Artificial Intelligence (AI). These modulators play a crucial role in various applications such as broadband networks, cable television, and cloud data centers. Fiber optic cables, with their high bandwidth capabilities, are becoming increasingly important for long-distance transmission and broadband subscribers. Additionally, electro-optic modulators (EOMs) are gaining traction due to their ability to manipulate laser beams effectively. With the continuous evolution of laser devices and fiber deployment, the optical modulators market is poised for substantial growth in the electronics industry.

Optical Modulators Market Scope
Report Coverage	Details
Page number	174
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 6.65%
Market growth 2023-2027	USD 9,519.57 million
Market structure	Fragmented
YoY growth 2022-2023(%)	5.55
Regional analysis	APAC, North America, Europe, Middle East and Africa, and South America
Performing market contribution	APAC at 55%
Key countries	US, Japan, China, Taiwan, and Germany
Competitive landscape	Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks
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.
Market dynamics	Parent market analysis, Market forecasting, 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 market research report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

Request PDF sample

What are the Key Data Covered in this Market Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

We can help! Our analysts can customize this report to meet your requirements. Get in touch