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The Optical Switches Market size is forecast to increase by USD 4.89 billion, at a CAGR of 11.38% between 2022 and 2027. The market's expansion hinges on various factors, notably the escalating construction of data centers to support digital infrastructure, the ongoing evolution of smart cities, and the pressing demand for enhanced network bandwidth capabilities. As data usage continues to surge across industries, the necessity for robust data center facilities is paramount, driving investments and technological advancements. Simultaneously, the progression of smart cities, integrating advanced technologies like IoT and AI, fuels the demand for efficient and interconnected networks. Moreover, the critical need for increased network bandwidth, driven by the proliferation of digital services and applications, underscores the market's growth trajectory, presenting opportunities and challenges for stakeholders across the network infrastructure landscape.
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This report extensively covers market segmentation by application (data communications, telecommunications, and others), type (large enterprise and SMEs), 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 historical market information from 2017 to 2021.
The market is driven by the demand for advanced technologies such as Electro-Optic Switching, Acoustic-Optic Switching, MEMS-based Switching, and Magneto-Optic Switching. Key trends include the adoption of optical switches in BFSI and Manufacturing sectors for efficient data packet routing and reduced energy consumption. Challenges involve optimizing high bandwidth for faster data transfer rates and ensuring seamless integration with smart appliances, connected homes, and IoT (Internet of Things) devices. Additionally, addressing automation needs across diverse industry verticals and IT & telecom sectors remains crucial. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The increasing data center construction is notably driving market growth. Data center operators are relying on new-age technologies, such as fiber optics networks, with the growth in information traffic and the emergence of the cloud in information centers and applications. Several investments are being made in the construction of information centers, which is increasing the need for fiber optic cables for information transmission.
Furthermore, fiber optic components, such as optical switches, are required for fast and efficient data transmission. Several optic fiber modules are required to connect numerous servers, storage devices, and switches, which increases the need for fiber optic components. Single-mode fibers are more suited for long-distance transmission, whereas multimode optic fibers are preferred for transmission over shorter distances. Thus, with the growing number of information centers, the demand for optical switches is expected to increase at a high rate, which will fuel the market growth during the forecast period.
The transition toward Ethernet fiber optics is a key trend influencing the market growth. Ethernet speeds have evolved to accommodate high speeds of up to 40 Gbps and 100 Gbps. Some firms are also trying to achieve 400 Gbps speeds, which will enable Ethernet-based services. The transition to high-speed Ethernet connectivity can be achieved by sending high-speed Ethernet signals over fiber optic cables. Fiber optics allow the transmission of data over longer distances.
Moreover, the need for faster Ethernet has increased, with the rising demand for Ethernet from data centers and telecommunication firms. Ethernet over fiber cables is an alternative that allows for faster transmission rates and requires a large set of fiber optic components. This, in turn, will support the global market growth during the forecast period.
Issues in optical fiber network deployments may impede market growth. There are significant growth opportunities for communication service providers in the multi-dwelling units (MDUs) category in the housing field. However, there are a few barriers to deploying fiber in MDUs. For example, space constraints and the presence of multiple cable networks increase the media installation time and the cost of the project.
Moreover, creating holes for the addition of conduits, pulling fiber above ceilings and within walls, and making other pathways are factors that result in bottlenecks, especially in brownfield MDUs. This generates a need for NOCs, approvals from customers and residents, and other important state and municipal approval certificates. Therefore, due to the low deployment of fiber cables in MDUs, the need for optical switches is less, which is hampering the growth of the market during the forecast period.
The market growth analysis 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 Customer Landscape
Market players 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.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market market players, including:
Qualitative and quantitative analysis of market players 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 market players as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize market players as dominant, leading, strong, tentative, and weak.
The market is witnessing significant advancements in various switching technologies such as Electro-Optic Switching, Acoustic-Optic Switching, MEMS-based Switching, and Magneto-Optic Switching. These innovations are transforming critical sectors like BFSI and Manufacturing by enhancing data packet routing and optimizing energy consumption. With a focus on high bandwidth and efficient data transfer rates, the market is leveraging advanced technologies to cater to emerging trends such as smart appliances, connected homes, and IoT (Internet of Things) devices. Automation plays a key role in streamlining processes across industry verticals and the IT & telecom sector, ensuring seamless device integration and efficient signal routing through optic fibers. Optical switches also contribute to amplifying and managing data packets effectively, offering versatile routing capabilities and optimizing input & output ports for swift light signal transmission and handling of electrical data. These advancements are driving the adoption of optical switches in diverse applications, making them indispensable components in modern data communication and networking infrastructures.
The market share growth by the data communications segment will be significant during the forecast period. The increase in the number of IoT applications is expected to create a demand for high-speed information connections. The number of individuals accessing content through smartphones has also increased rapidly, which has led to the need for information centers, network infrastructure, virtualization software (software-defined networking), and network functions virtualization (NFV). Therefore, the adoption of network infrastructure, including switches, routers, and security appliances, is growing.
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The data communications segment showed a gradual increase in the market share of USD 2.19 billion in 2017 and continued to grow by 2021. Cloud computing requires high computational power and enables flexible, scalable, and efficient business operations. Therefore, CSPs such as Google and Microsoft deploy high-speed Ethernet, which is expected to drive the demand for optical switches. The growth of 10 G/40 G/100 G information centers in the information communication and telecommunication segments will also drive the demand for optical switches in the forecast period.
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APAC is estimated to account for 55% of 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 importance of information center operations among large enterprises and government agencies is increasing in APAC. Many European information center providers are targeting Asia after Brexit, which is expected to boost the APAC market. Singapore, India, Japan, China, and Australia are leading in terms of data center investments in APAC. Many CSPs, including Amazon Web Services and Microsoft, have opened data centers in India. Furthermore, co-location providers are expanding their footprint in APAC to meet consumer demands. The high penetration of low-cost 3G- and 4G-enabled smartphones and the demand for Internet protocol-based voice, data, and video services are also driving the market growth in this region.
The report forecasts market growth by revenue at global, regional, and country levels and provides market research and growth analysis of the latest market trends and growth opportunities from 2017 to 2027.
The global industry is witnessing significant advancements across various switching technologies such as Electro-Optic Switching, Acoustic-Optic Switching, MEMS-based Switching, and Magneto-Optic Switching. These innovations are driving transformations in critical sectors like BFSI and Manufacturing by enhancing data packet routing and optimizing energy consumption.
Moreover, optical switches play a crucial role in managing optical fibers and facilitating seamless communication through light signals. They enable efficient data transmission paths, particularly in high-speed networks, by integrating external modulators, Optical cross-connects (OXCs), and Optical add-drop multiplexers (OADM). Key areas of focus include Fiber optic component testing, Wavelength routing, and Fiber management, ensuring switching protection and network restoration capabilities. With continuous technical improvements and increased investments in optical devices, the market is poised for significant growth, supporting the expanding needs of optical communication, digital transformation, and mobile connectivity across diverse sectors.
Furthermore, innovations such as Space division multiplexing (SDM) technology and advancements in Ethernet Media Converters are enhancing optical network capacity, aligning with initiatives like IoT (Internet of Things), virtual reality, and data center construction. Additionally, efforts from organizations like Germany's Federal Ministry of Education and Research (BMBF) are driving research in next-generation data centers, supercomputers, and secure OTN (Optical Transport Network) solutions. Overall, the market is witnessing a surge in demand for high bandwidth, secure, and technologically advanced products to meet the evolving needs of the IT & telecom sector and various industries reliant on robust networking infrastructure.
Market Scope |
|
Report Coverage |
Details |
Page number |
172 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 11.38% |
Market growth 2023-2027 |
USD 4.89 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
10.58 |
Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
Performing market contribution |
APAC at 55% |
Key countries |
US, China, South Korea, India, and France |
Competitive landscape |
Leading market players, Market Positioning of market players, Competitive Strategies, and Industry Risks |
Key companies profiled |
Agilent Technologies Inc., Agiltron Inc., Broadcom Inc., Cisco Systems Inc., D Link Corp., Fujitsu Ltd., Furukawa Electric Co. Ltd., HP Inc., Huawei Investment and Holding Co. Ltd., Infinera Corp., Juniper Networks Inc., Keysight Technologies Inc., NEC Corp., Nokia Corp., NTT Advanced Technology Corp., ON Semiconductor Corp., Siemens AG, Telefonaktiebolaget LM Ericsson, Yokogawa Electric Corp., and ZTE Corp. |
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 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 Application
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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