Global Optical Interconnect Market

Optical Interconnect Market Size, Share, Growth Analysis, By Product(Cable Assemblies, Connectors, Free Space Optics, Fiber), By Application(Telecommunication, And Data Communication), By Fiber Mode(Single-Mode Fiber, and Multimode Fiber), By Region - Industry Forecast 2024-2031


Report ID: SQMIG45K2106 | Region: Global | Published Date: March, 2024
Pages: 198 |Tables: 93 |Figures: 69

Optical Interconnect Market Insights

Global optical interconnect market size was valued at USD 11.6 billion in 2022 and is poised to grow from USD 13.05 billion in 2023 to USD 33.48 billion by 2031, growing at a CAGR of 12.5% in the forecast period (2024-2031).

Optical interconnect is a term used to describe the various methods used to move data from one location to another through light. The optical interconnect market is expected to increase rapidly during the forecast period. Optical interconnect solutions are widely demanded in data centers and telecommunication sectors. Respective governments across the globe are offering several initiatives supporting the deployment of data centers. Technological advancements, Big Data Analytics, and the Internet of Things are further increasing the efficiency of optical interconnect systems. The rising network traffic is creating opportunities for optical interconnect service providers. Key players in the optical interconnect market are adopting several organic and inorganic marketing tactics to earn high profits. The strategies include product innovations, diversification, global expansion, a customer-centric approach, and mergers and collaborations. Integration of advanced technologies increases the productivity of systems leading to appealing to a wider consumer base.

Market Snapshot - 2024-2031

Global Market Size

USD 11.6 billion

Largest Segment

Telecommunication

Fastest Growth

Data Communication

Growth Rate

12.5% CAGR

Global Optical Interconnect Market ($ Bn)
Country Share for North America Region (%)

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Optical Interconnect Market Segmental Analysis

The global optical interconnect market is segmented based on product, application, and region. In terms of product, the market is segmented into cable assemblies, connectors, free space optics, fiber, and waveguides, silicon photonics, PIC-based Interconnects, and optical engines. Based on application, the market is bifurcated into telecommunication and data communication. Based on fiber mode, the market is bifurcated into single-mode fiber, and multimode fiber. Based on region, the market is segmented into Asia Pacific, North America, Latin America, Europe, and the Middle East and Africa.

Analysis by Product

The cable assemblies' segment is dominating the global market share. Reliable and consistent connectivity is widely demanded across various devices and systems. In today's digital era, effective connectivity between two components is driving high demand for cable assemblies. Key market players are offering advanced cable assemblies with effective features to meet the consumer’s demands. The expansion of the telecommunication sector across the globe is uplifting the sales of smart cable assemblies.

Sales of connectors are likely to rise at a high pace during the coming decade. The growth in cloud computing and expansion of data centers across the globe is increasing the demand for connectors such as LC connectors, ST connectors, LC connectors, and MPO/MTO connectors. These components are integral in connecting and supporting large-scale data processing and storage. Continuous innovations are also increasing the sales of cutting-edge optical interconnect systems.

Analysis by Application

The telecommunication segment holds a high global market share. Telecommunication services or networks that involve video conferencing, streaming, and cloud computing are increasing the use of optical interconnect systems. Optical interconnect systems help to transmit data at a robust speed compared to traditional solutions. The efficient and reliable means of data transfer boosts the sales of optical interconnects across telecommunication applications.

The use of optical interconnect solutions is increasing at a high CAGR in data communication, especially in data centers. High bandwidth, long-distance transmission, energy efficiency, and improved network performance are driving the sales of optical interconnect solutions in data communication. Energy consumption is a critical factor in data centers optical interconnect solution helps to reduce the energy consumption of the communication infrastructure. Moreover, data communication particularly in applications in cloud computing with low latency is important. It helps in faster data transmission compared to traditional interconnects.

Global Optical Interconnect Market By Application, 2022 (%)

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Optical Interconnect Market Regional Insights

Asia Pacific is slated to emerge as the fastest-expanding regional market in the global optical interconnect market. The ongoing development in the communication sector in the Asia Pacific region is majorly driving the sales of optical interconnect systems. China and India are key markets for optical interconnect producers. Most optical cable demand is observed from China. Thus, the presence of strong end users and dominance of domestic markets is fueling the sales of optical interconnect systems.

High internet usage and the presence of giant data centers are boosting the high sales of optical interconnects in North America allowing us to hold a prominent chunk of the global market share. The United States and Canada are majorly contributing to the North American market growth. Key market players operating in North America are focusing on acquisitions to increase their market shares. Furthermore, growing investments in the deployment of 5G networks are increasing the need for effective optical interconnect systems. The rapid growth in the equipment manufacturing sector is also increasing the demand for optical interconnect solutions in North America.

Global Optical Interconnect Market By Region, 2024-2031
  • Largest
  • Fastest

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Optical Interconnect Market Dynamics

Drivers

Surge in Demand for High-speed Data Transmission

  • Growing data centers and surging adoption of advanced digital services around the world are projected to promote high-speed data transmission worldwide. Optical interconnect solutions can fulfil this demand and hence this can drive optical interconnect market growth in the future.

Rise of High-Performance Computing

  • Low latency is the key to unlocking the full potential of high-performance computing, which is being used extensively across different industry verticals. Deployment of optical interconnect solutions could help high performance computing models enhance their performance in the future.

Restraints

Complexity of Implementation

  • Optical interconnect solutions are highly complex and therefore their maintenance and installation are also very expensive as compared to traditional technologies. The requirement of specialized equipment and skilled professionals to handle optical interconnect products is also estimated to slow down market development over the coming years.

Interoperability Challenges

  • Interoperability between different components on an optical interconnect system could restrain optical interconnect product sales outlook across the forecast period. Different vendors could create different solutions that may not be compatible with one another, and this can be resolved through standardization.

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Optical Interconnect Market Competitive Landscape

Optical interconnect providers can benefit from the growing adoption of advanced digital technologies as they bring about the need for high-speed data transfers. Increasing adoption of cloud-based platforms is another trend that will help new as well as established optical interconnect market players to maximize their business potential across the forecast period and beyond. Optical interconnect providers can also collaborate or partner with tech companies that are looking to increase their bandwidth to grow their business in the future. Moreover, companies can always focus on research and development of novel optical interconnect technologies to create innovative new products.

Top Player’s Company Profiles

  • II-VI Incorporated
  • Amphenol Corporation
  • Sumitomo Electric Industries Ltd.
  • Lumentum Operations LLC
  • Cisco Systems Inc.
  • Molex LLC
  • Broadcom Inc.
  • InnoLight Technology Ltd.
  • Fujitsu Ltd.
  • Huawei Technologies Co. Ltd.
  • TE Connectivity
  • Corning Incorporated
  • NVIDIA Corporation

Recent Developments

  • In June 2023, Google and Microsoft collaborated with Lumen Technologies to create and launch a new optical interconnect ecosystem. This solution will satisfy the demand for high bandwidth whilst switching between networks dynamically.
  • Smiths Interconnect, a renowned name in the global optical interconnect space announced the launch of its new blind-mate optical interconnect system back in February 2022. The new launch was compliant with military standards.
  • Reflex Photonics, a Canada-based company was awarded a contract to supply optical module devices back in May 2021. These modules were intended to be used in high throughput communication satellites.

Optical Interconnect Key Market Trends

  • Advent of Silicon Photonics: Silicon photonics is the trend of integrating optical components on a single silicon chip. Optical interconnect companies can leverage this trend to maximize their sales by focusing on products such as CMOS semiconductor electronics. This trend can also help companies capitalize on the growing demand for miniaturization of electronics.

Optical Interconnect Market SkyQuest Analysis

SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Co-relates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.

As per our analysis, the rapid adoption of advanced digital technologies and rising emphasis on increasing data transfer and transmission bandwidth are key factors that are estimated to bolster the demand for optical interconnects over the coming years. An increasing number of data centers around the world and advancements in optical technology are also forecasted to promote market development going forward. However, high costs and complexity of optical interconnect systems are predicted to be key constraints that limit optical interconnect market growth across the forecast period. Meanwhile, optical interconnect market players can focus on the North American market to get the best return on their investments. The adoption of silicon photonics and growing demand for high-density interconnect solutions are key trends that optical interconnect companies should target in the long run.

Report Metric Details
Market size value in 2022 USD 11.6 billion
Market size value in 2031 USD 33.48 billion
Growth Rate 12.5%
Base year 2023
Forecast period 2024-2031
Forecast Unit (Value) USD Billion
Segments covered
  • Product
    • Cable Assemblies, Connectors, Free Space Optics, Fiber, And Waveguides, Silicon Photonics, PIC-Based Interconnects, and Optical Engines
  • Application
    • Telecommunication, And Data Communication
  • Fiber Mode
    • Single-Mode Fiber, and Multimode Fiber
Regions covered North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA)
Companies covered
  • II-VI Incorporated
  • Amphenol Corporation
  • Sumitomo Electric Industries Ltd.
  • Lumentum Operations LLC
  • Cisco Systems Inc.
  • Molex LLC
  • Broadcom Inc.
  • InnoLight Technology Ltd.
  • Fujitsu Ltd.
  • Huawei Technologies Co. Ltd.
  • TE Connectivity
  • Corning Incorporated
  • NVIDIA Corporation
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Table Of Content

Executive Summary

Market overview

  • Exhibit: Executive Summary – Chart on Market Overview
  • Exhibit: Executive Summary – Data Table on Market Overview
  • Exhibit: Executive Summary – Chart on Optical Interconnect Market Characteristics
  • Exhibit: Executive Summary – Chart on Market by Geography
  • Exhibit: Executive Summary – Chart on Market Segmentation
  • Exhibit: Executive Summary – Chart on Incremental Growth
  • Exhibit: Executive Summary – Data Table on Incremental Growth
  • Exhibit: Executive Summary – Chart on Vendor Market Positioning

Parent Market Analysis

Market overview

Market size

  • Market Dynamics
    • Exhibit: Impact analysis of DROC, 2021
      • Drivers
      • Opportunities
      • Restraints
      • Challenges
  • SWOT Analysis

KEY MARKET INSIGHTS

  • Technology Analysis
    • (Exhibit: Data Table: Name of technology and details)
  • Pricing Analysis
    • (Exhibit: Data Table: Name of technology and pricing details)
  • Supply Chain Analysis
    • (Exhibit: Detailed Supply Chain Presentation)
  • Value Chain Analysis
    • (Exhibit: Detailed Value Chain Presentation)
  • Ecosystem Of the Market
    • Exhibit: Parent Market Ecosystem Market Analysis
    • Exhibit: Market Characteristics of Parent Market
  • IP Analysis
    • (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
  • Trade Analysis
    • (Exhibit: Data Table: Import and Export data details)
  • Startup Analysis
    • (Exhibit: Data Table: Emerging startups details)
  • Raw Material Analysis
    • (Exhibit: Data Table: Mapping of key raw materials)
  • Innovation Matrix
    • (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
  • Pipeline product Analysis
    • (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
  • Macroeconomic Indicators

COVID IMPACT

  • Introduction
  • Impact On Economy—scenario Assessment
    • Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
  • Revised Market Size
    • Exhibit: Data Table on Optical Interconnect Market size and forecast 2021-2027 ($ million)
  • Impact Of COVID On Key Segments
    • Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
  • COVID Strategies By Company
    • Exhibit: Analysis on key strategies adopted by companies

MARKET DYNAMICS & OUTLOOK

  • Market Dynamics
    • Exhibit: Impact analysis of DROC, 2021
      • Drivers
      • Opportunities
      • Restraints
      • Challenges
  • Regulatory Landscape
    • Exhibit: Data Table on regulation from different region
  • SWOT Analysis
  • Porters Analysis
    • Competitive rivalry
      • Exhibit: Competitive rivalry Impact of key factors, 2021
    • Threat of substitute products
      • Exhibit: Threat of Substitute Products Impact of key factors, 2021
    • Bargaining power of buyers
      • Exhibit: buyers bargaining power Impact of key factors, 2021
    • Threat of new entrants
      • Exhibit: Threat of new entrants Impact of key factors, 2021
    • Bargaining power of suppliers
      • Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
  • Skyquest special insights on future disruptions
    • Political Impact
    • Economic impact
    • Social Impact
    • Technical Impact
    • Environmental Impact
    • Legal Impact

Market Size by Region

  • Chart on Market share by geography 2021-2027 (%)
  • Data Table on Market share by geography 2021-2027(%)
  • North America
    • Chart on Market share by country 2021-2027 (%)
    • Data Table on Market share by country 2021-2027(%)
    • USA
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • Canada
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
  • Europe
    • Chart on Market share by country 2021-2027 (%)
    • Data Table on Market share by country 2021-2027(%)
    • Germany
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • Spain
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • France
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • UK
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • Rest of Europe
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
  • Asia Pacific
    • Chart on Market share by country 2021-2027 (%)
    • Data Table on Market share by country 2021-2027(%)
    • China
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • India
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • Japan
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • South Korea
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • Rest of Asia Pacific
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
  • Latin America
    • Chart on Market share by country 2021-2027 (%)
    • Data Table on Market share by country 2021-2027(%)
    • Brazil
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • Rest of South America
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
  • Middle East & Africa (MEA)
    • Chart on Market share by country 2021-2027 (%)
    • Data Table on Market share by country 2021-2027(%)
    • GCC Countries
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • South Africa
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • Rest of MEA
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)

KEY COMPANY PROFILES

  • Competitive Landscape
    • Total number of companies covered
      • Exhibit: companies covered in the report, 2021
    • Top companies market positioning
      • Exhibit: company positioning matrix, 2021
    • Top companies market Share
      • Exhibit: Pie chart analysis on company market share, 2021(%)

Methodology

For the Optical Interconnect Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:

1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.

2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Optical Interconnect Market.

3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.

4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.

Analyst Support

Customization Options

With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Optical Interconnect Market:

Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.

Regional Analysis: Further analysis of the Optical Interconnect Market for additional countries.

Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.

Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.

Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.

Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.

Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.

Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.

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FAQs

optical interconnect market size was valued at USD 11.6 billion in 2022 and is poised to grow from USD 13.05 billion in 2023 to USD 33.48 billion by 2031, growing at a CAGR of 12.5% in the forecast period (2024-2031).

Optical interconnect providers can benefit from the growing adoption of advanced digital technologies as they bring about the need for high-speed data transfers. Increasing adoption of cloud-based platforms is another trend that will help new as well as established optical interconnect market players to maximize their business potential across the forecast period and beyond. Optical interconnect providers can also collaborate or partner with tech companies that are looking to increase their bandwidth to grow their business in the future. Moreover, companies can always focus on research and development of novel optical interconnect technologies to create innovative new products. 'II-VI Incorporated', 'Amphenol Corporation', 'Sumitomo Electric Industries Ltd.', 'Lumentum Operations LLC', 'Cisco Systems Inc.', 'Molex LLC', 'Broadcom Inc.', 'InnoLight Technology Ltd.', 'Fujitsu Ltd.', 'Huawei Technologies Co. Ltd.', 'TE Connectivity', 'Corning Incorporated', 'NVIDIA Corporation'

Growing data centers and surging adoption of advanced digital services around the world are projected to promote high-speed data transmission worldwide. Optical interconnect solutions can fulfil this demand and hence this can drive optical interconnect market growth in the future.

Advent of Silicon Photonics: Silicon photonics is the trend of integrating optical components on a single silicon chip. Optical interconnect companies can leverage this trend to maximize their sales by focusing on products such as CMOS semiconductor electronics. This trend can also help companies capitalize on the growing demand for miniaturization of electronics.

Asia Pacific is slated to emerge as the fastest-expanding regional market in the optical interconnect market. The ongoing development in the communication sector in the Asia Pacific region is majorly driving the sales of optical interconnect systems. China and India are key markets for optical interconnect producers. Most optical cable demand is observed from China. Thus, the presence of strong end users and dominance of domestic markets is fueling the sales of optical interconnect systems.

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