Optical Transceiver Market Outlook - 2027

Optical transceiver is an integrated circuit (IC) that acts as a single module in optical communication to transmit and receive critical information over different communication channels including ethernet. A transceiver chip is made of semiconductor material such as indium phosphide, gallium arsenide, and consumes negligible power. Optical transceivers are used for transmitting large volume of data by converting light beam to electrical signals and vice versa. 

Optical transceivers are primarily used in the telecommunication sector as they can handle massive amount of storage, data, voice, and video traffic by providing increasing bandwidth with low power consumption. Cost-efficient, flexible transceiver modules are implemented in a wide area network and long-haul connections as they can adapt to changes and are specifically designed to transfer enormous amount of data in ultra-low latency. These devices are reliable and manageable as they prepare data centers and cloud services for future bandwidth and speed requirements, which enhances the product quality standards. Data rates of more than 100Gbps along with proliferation of connected smart devices incorporated with machine learning and 5G communications is anticipated to boost growth of the optical transceiver market share in the future.

Market Scope and Structure Analysis:

Covid-19 Scenario Analysis:

• COVID-19 outbreak in Wuhan has led to shutdown of logistical hubs in China and worldwide. Wuhan alone accounts for 20% of China’s perform capacity in the optical communication industry and ongoing disruption is causing discernible effect to domestic and overall global supply. Assessment of the impact of the virus on the global optical transceiver industry is highly speculative.
• In this situation of unprecedented nation-wide lockdowns, companies are relying on data connectivity, which is the only way to travel across borders. Most businesses are enabling employees to work from home, thus relying on optical wireless infrastructure to conduct business services as simple as possible.
• In 2020, Cisco reported that India witnessed 87% surge in data usage in the first week of lockdown while internet browsing was up by 72%.
• Advanced initiatives to fulfil the demand of high-speed data transmission such as 5G deployment in China implies that the optical transceiver market seems to be on a stable ground as lockdown restrictions are lifted. The concerned industry is anticipated to be undergoing active growth by the end of 2020, owing to never-ending demand for broadband access requiring active optical cables, Ethernet, and DWDM optic modules.

Top Impacting Factors: Market Scenario Analysis, Trends, Driver, and Impact analysis

Rapid expansion of hyperscale data centers to provide high bandwidth with a view to support increase in high-speed data traffic, growth in online video content, cloud services, social networking, and e-commerce primarily drives the optical transceiver market growth. However, intense competition, owing to presence of large number of manufacturers, high initial investments, rise in labor cost, and increase in network complexity restrain the optical transceiver market growth.

On the contrary, need for increasing bandwidth for inter-data centers or intra-data center connectivity to fulfil high-speed long-distance data communication needs through virtual services boosts the market revenue.  Proliferation of connected devices accompanied by technological advancements such as AI, machine learning, and 5G communication requiring higher bandwidth is anticipated to pave newer pathways for the optical transceiver industry.

New product launches to flourish the market:

Leading market players adopt necessary steps to enable instant transfer of information through communication networks across long distances to allow hyperscale data centers to rapidly compile and analyze vast amount of data.

In March 2020, II-VI Incorporated, leader in coherent optics, introduced 400G CFP2-DCO module based on new generation 7 nm CMOS DSP technology, which enables transmission capacity of 25.6 Tbps over a single fiber by tuning to 64 wavelength channels on a 75 GHz grid. Each module can transport up to 400 Gbps of data over a single wavelength using 64 GBaud 16QAM modulation. The module can multiplex four 100G client signals and supports mix of IEEE 100G Ethernet, 200G, 400G Ethernet, and ITU-T Optical Transport Network OTU4 or OTUC (FlexO) as well as ITU-T OTUC2, OTUC3, and OTUC4 host side interfaces. High-performance 400 Gbps coherent transmission in pluggable form factor is supported by this module for high-speed optical networks and hyperscale datacenter interconnects.

Surge in use in industrial and automotive applications

Optical transceivers allow people to collect, transport and analyze vast amount of data through vast number of high-bandwidth interconnections between myriad of nodes such as machines, sensors, facilities, and data centers. Industrial ethernet also called the Industry 4.0 offers higher communication speed and efficiency for factory automation, power generation, and healthcare delivery.

In February 2020, Fujitsu Optical Components Ltd., a global optical solution provider, launched 400Gbps ZR transceiver. It features 7nm CMOS coherent DSP, silicon photonics integrated optical devices and high-density packaging technology with QSFP-DD and OSFP form factors. The transceiver being compact, low power consuming is installed into switches, routers. This enables rapid 400Gbps DWDM transmission as compared to 100/200Gbps coherent transceivers. Large capacity optical networks offer seamless interconnectivity of multiple hyperscale data centers, which improves data center availability, traffic distribution, and resource efficiency.

Key segments covered:

Key benefits of the stakeholders:

• The study gives an analytical overview of Optical Transceiver market forecast with current trends and future estimations to determine imminent investment pockets.
• The report provides information related to key drivers, restraints, and opportunities along with detailed Optical Transceiver market analysis.
• The current Optical Transceiver market trends are quantitatively analyzed from 2021 to 2027.
• Porter’s five forces analysis illustrates the potency of buyers & suppliers in the market. 

Questions answered in the optical transceiver market research report:

• Who are the leading players in the optical transceiver market?
• What are the current trends that would influence the market in the next few years?
• What are the driving factors, restraints, and opportunities in the market?
• What are the projections for the future that would help in taking further strategic steps?
• What would be the detailed impact of COVID-19 on the market?