Optical Interconnect Market worth 13.03 Billion USD by 2022

The optical interconnect market is estimated to grow from USD 3.66 Billion in 2015 to USD 13.03 Billion by 2022, at a CAGR of 18.13% between 2016 and 2022.

The demand for optical interconnect systems is expected to increase due to the increasing high bandwidth and low power consumption requirements in the data center networks

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The rise in bandwidth requirements and need for reducing power consumption within the data center networks has created a need for highly efficient interconnects, which cannot be fulfilled by traditional copper-based electrical interconnects. Data center operators need much higher bandwidth to sustain the increase of network traffic due to cloud computing and other emerging web applications. Current data center networks based on commodity switches require excessive amount of power to face this traffic increase. Optical interconnection networks have recently emerged as a promising solution that can provide higher throughput while consuming less power.

Optical transceivers market to play a key role in the optical interconnect market

The optical transceiver product category is expected to hold the largest market share and dominate the optical interconnect market between 2016 and 2022, owing to the increasing adoption of 100 G and 40 G data rates-based optical devices. Due to the increased penetration of Internet and cloud computing, there is a huge bandwidth requirement which can be sustained only through optical transceivers which can support data rates above 25 G.

Data communication application held the largest market share in 2015

The data communication application is expected to hold the largest market share and dominate the optical interconnect market between 2016 and 2022. The increasing installation of mega data centers, which occupy space above 22,501 square meters, has led to unprecedented rise in high-density optical networks, causing increase in uptake for optical interconnects.

North America expected to hold the largest market share and APAC is expected to grow at the highest rate

North America is expected to hold the largest market share and dominate the optical interconnect market between 2016 and 2022. The virtual monopoly of North America in the Internet-based businesses due to the presence of companies such as Facebook, Oracle, IBM, Microsoft and Google, coupled with very high penetration of Internet among the general population as well as within the industries makes the region a leader in the optical interconnect market. However, the optical interconnect market in the APAC is expected to show a very fast growth on the back of rapidly increasing internet connectivity, high growth in digital businesses such as e-commerce in countries such as India and China and continuous spending by governments and industries in upgrading the current communication infrastructure.

The optical interconnect ecosystem includes the fiber providers such as Dow Corning (U.S.) 3M Company (U.S.), Furukawa OFS (Japan), among others; the cable and cable assemblies, connectors, and transceiver/optical module manufacturers such as Finisar (U.S.), Mellanox (U.S.), Molex (U.S.), Oclaro Inc (U.S.), Acacia Communication (U.S.), among others. System Integrators and network equipment providers include Infinera (U.S.), Ciena (U.S.), and Huawei (China), among others.