Global Optical Transceiver Market by Form Factor (SFF, SFP, QSFP, CFP, XFP, and CXP), Data Rate (Less than 10 Gbps, 10 Gbps to 40 Gbps, 41 Gbps to 100 Gbps, and More than 100 Gbps), Fiber Types (Single Mode Fiber and Multimode Fiber), Distance (Less than 1 km, 1-10 km, 11-100 km, and More than 100 km), Wavelength (850nm Band, 1310nm, 1550nm Band, and Others), Connectors (LC Connector, SC Connector, MPO Connector, and RJ-45), Applications (Telecommunication and Data Center), and Regions (North America, Europe, Asia Pacific, Latin America, and Middle East & Africa), Forecast 2021-2028

The global optical transceiver market is estimated to expand at a CAGR of 15% during the forecast period, 2021-2028. An optical transceiver is a compact, powerful device that send and receive data. Data is transmitted in the form of light pulses above an optical fiber in optical communication and networking. The transceiver is an essential component of such a network as it converts electrical signals to light signals and vice versa. Various transceivers are open to multiple jobs depending on the type of data to be carried and the speed and distance.

Both hardware and software are important in emerging infrastructure and the adoption of open-source platforms through the cloud has made the network more compact. This, in turn, has led housing of drop modules for multiplexing and demultiplexing, variable optical attenuators, and tap power monitors in a single compact unit for network monitoring and control.

Furthermore, it has resulted in increased network complexity, creating delay in data packet delivery, which has increased demand for compact form factors. The form factor is recognized as a major choice for data center communication by a transceiver MSA group that includes Cisco, Broadcom, Juniper, Intel, and others. It has eight high-speed electrical connections that connect to the host, each capable of 100G/s.

The COVID-19 pandemic has a substantial impact on the global optical transceiver market. The production facilities of the electronics and semiconductor sector were halted due to the global decline and unavailability of employees. The COVID-19 pandemic has resulted in a significant and sustained decline in manufacturing capacity, owing to lack of employees and raw materials, travel restrictions, and facility closures, leading in a slowdown in the growth of the optical transceiver market in 2020.

Market Trends, Drivers, Restraints, and Opportunities

• Increasing adoption of smart devices and rising data traffic are some of the key factors driving the market growth.
• Growing demand for compact and energy-efficient transceivers and increased importance of mega data centers for longer reach and high rates of data transmission with efficient power consumption are major factors spurring the growth of the market.
• Rising number of cloud computing applications and penetration of the cloud computing technology due to the increased reliability that cloud computing delivers over in-house servers are fostering the market growth.
• Rapid construction of data centers that enable streaming media, cloud services, social networking, and online commerce are fueling the market growth
• The existence of cloud firms such as Amazon, Microsoft, and Google accelerate the optical transceivers growth in order to achieve higher bandwidth and quicker data rates to manage massive amounts of data.
• The emergence of 800G optical transceivers and intensive R&D activities are projected to drive the market amidst the COVID-19 pandemic.

Scope of the report:

The report on the optical transceiver market includes an assessment of the market, size, share, trends, segments, and regional markets. Overview and dynamics have been included in the report.

Global Optical Transceiver Market segments insights

QSFP segment expected to dominate the market

Based on form factor, the market can be fragmented into SFF, SFP, QSFP, CFP, XFP, and CXP. The QSFP segment is expected to dominate the market during the forecast period. The optical transceivers of the Quad small form-factor pluggable (QSFP) form factor are designed for high performance and low power consumption, finding them appropriate for data center applications. Data traffic is growing as a result of technology breakthroughs such as AI, machine learning, and 5G communication, creating a demand for large-scale data centers.

QSFP optical transceivers are capable of high data transmission and are used throughout datacom/telecom switch and router connections, data aggregation and backplane applications, customized protocol, and density applications. This form factor has low power consumption, which in turn, has increased preference among 800G transceivers, and their pluggable form factor is regarded as an ideal choice for data center connectivity.

41 Gbps to 100 Gbps segment to grow at a healthy rate

On the basis of data rate, the market can be segregated into less than 10 Gbps, 10 Gbps to 40 Gbps, 41 Gbps to 100 Gbps, and more than 100 Gbps. The 41 Gbps to 100 Gbps segment is estimated to grow significantly during the forecast period. The demand for higher data transmission drives the demand for 100G, 200G, and 400G transceivers. With the introduction of advanced technologies such as AI and 5G have grown demand for higher bandwidth, which is eventually used for data center applications. High-bandwidth apps, increased data transfer capabilities, fast fixing broadband rates, rising online video content, mobile internet users, and the spread of connected gadgets have all contributed to the growth in Internet penetration traffic.

Furthermore, the increasing adoption of smart devices and IoT is driving up demand for high data rate-enabled optical transceivers. Optical transceivers with speeds range between 41 Gbps to 100 Gbps and higher are increasingly preferred among global cloud service providers such as Amazon, Facebook, Google, and Microsoft.

In terms of wavelength, the market can be divided into 850nm Band, 1310nm, 1550nm Band, and others. The 1310nm segment is estimated to account a significant market share during the forecast period. 1310 nm bandwidth level is intended to perform at higher operational temperature while using less power and spending less money. Single-mode fibers can be tailored for wavelengths of 1310 nm. At this wavelength, the attenuation of fiber optics is substantially smaller. High-speed data transfer is possible using optical transceivers operating in 1310 nm bandwidth.

Absorption losses are low at this wavelength. Therefore, the increasing requirement for high data rate transceivers and high-speed computing across data center applications supports the market growth segment. The CWDM (Coarse Wavelength Division Multiplexing) optical module are deployed for the 1310 nm wavelength, providing excellent flexibility, economy, and network dependability. It significantly saves optical fiber resources and lowers building costs.

Data center segment to constitute a major market share

Based on applications, the market can be classified as telecommunication and data center. The data center segment is estimated to hold a major market share during the forecast period. This market growth is due to factors such as the transformation to cloud storage and increasing technological developments such as machine learning, artificial intelligence, and deep learning, which, in turn, increase data traffic across networks, creating a demand for high data rate transceivers for efficient data communication.

The growth of hyperscale data centers also drives the demand for high data rate optical transceivers, such as 100G, 200G, 400G, and 800G, for channeling massive packets of information across shorter distances. Leading cloud service providers, including Google, Amazon, and Microsoft, are putting high data rate transceivers in their data centers. With the anticipated increase in the number of OTT platforms such as Netflix, HBO, Disney, and Amazon Prime, the number of data centers and reliance on them is expected to increase significantly, potentially fostering the data center market segment.

Asia Pacific to account a large market share

On the basis of regions, the market can be segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. Asia Pacific is projected to hold a prominent market share in the optical transceiver market during the forecast period. Increasing investment in 4G and 5G networks by telecommunication companies such as China Broadcast Network (China), Rakuten (Japan), and Dito Telecom (Philippines is driving the regional market growth.

The market in North America is expected to grow at a steady rate in the projected timeline due to presence of firms such as II-VI, Lumentum, Broadcom, Mellanox, NeoPhotonics, Reflex Photonics, Cisco, and Ciena. These firms address the growing demand for specialized optical transceiver modules such as coherent pluggable modules, bidirectional (BiDi) modules, and QSFP modules with a distance range of over 2,000 km and ultra-high-speed 800G optical transceiver modules for telecommunication, data center, and enterprise applications.

Segments

Segments Covered in the report

By Form Factors

• SFF
• SFP
• QSFP
• CFP
• XFP
• CXP

• Less than 10 Gbps
• 10 Gbps to 40 Gbps
• 41 Gbps to 100 Gbps
• More than 100 Gbps

• Single Mode Fiber
• Multimode Fiber

• Less than 1 km
• 1-10 km
• 11-100 km
• More than 100 km

• 850 nm Band
• 1310 nm Band
• 1550nm Band
• Others

• LC Connector
• SC Connector
• MPO Connector
• RJ-45

• Telecommunication
• Data Center

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa

• Accelink
• ACON
• Alcatel-Lucent
• Ikanos
• Luxtera
• Foxconn Technology Group
• POLYSYS
• Rohm Semiconductor
• Sumitomo
• Triquint
• Photon-X
• Oclaro
• Broadcom
• 3SP Group
• Emcore
• Huawei
• Others

Competitive Landscape

The key players include Accelink, ACON, Alcatel-Lucent, Ikanos, Luxtera, Foxconn Technology Group, POLYSYS, Rohm Semiconductor, Sumitomo, Triquint, Photon-X, Oclaro, Broadcom, 3SP Group, Emcore, Menara Networks, Vitesse and Zhone Technologies, NeoPhotonics, Oplink, Reflex Photonics, Huawei, Cube Optics, Furukawa Electric, Champion Optical Network Engineering LLC, MRV, Agilent Technologies, Santec-Source Photonics, JDSU, Finisar, Fujitsu, Avago Technologies, NEC, NTT, Gigoptix, and Transmode.

NTT Communications, a prominent player in Japan installed a single-wave 800G line speed solution for data center interconnect (DCI) in November 2020, enabling Japan's first 800G ultra-high-capacity network for DCI. With an 800G solution, network operators, service providers, and content providers transport more data per wavelength installed or extend wavelengths over greater distances without requiring regeneration. In comparison to 200G and 400G Ethernet, 800G is a newer technology. However, as the demand for higher bandwidth networking equipment and connections in cloud growth and hyperscale data centers rises, 800G optical modules and transmissions are unavoidable trends in the next 3 to 5 years.