Optical Transceiver

Global optical transceiver will have a fast development over the next five years. According to the WK Research, “Global Optical Transceiver Professional Survey Report 2024, Forecast to 2029”, benefits offered by optical transceiver includes space saver along with no requirement of the additional transmitter and a receiver are driving the growth of the market.. The compound annual growth rate (CAGR) for the 2024-2029 period is projected to be 14.81% base on WK Research regression analysis model.


Analysts’ Viewpoint:
“Governments should take initiatives such as smart city initiatives with rich fibre networks to enable smooth flow of IoT infrastructure. Fiber optic networks enable the technology to drive utilities such as water, electricity, wastewater, wastewater management and their security and communications. This will drive more smart city projects around the world, as well as boost the application of optical transceivers, thereby increasing the market share of optical transceivers”, said Barbara Patel, Senior analyst, in WK Research.

Product Introduction:
Optical transceivers are defined as the devices that are used in optical communication in order to transfer critical information over different communication channels including the Ethernet. The optical transceiver has a similar operation to that of the radio or a telephone system as it acts as a single module to transmit and receive information. Optical transceivers are capable of handling all storage, data, voice, and video traffic whether linking rack to rack, bottom to the top of the rack, data center to data center, or enterprise networks to the network. Benefits offered by optical transceivers include space savers along with no requirement of the additional transmitter and a receiver.

Market insight:
The increasing demand for low-cost transceivers, due to energy-efficient characteristics, boosted their sales across telecom and data center applications. Currently, the smaller, cheaper, and energy-efficient optical transceivers have great demand in the market. Since the launch of the CFP module, various improvements in the technological segment have resulted in the development of compact form factors. Data centers and enterprises require longer reach and high rates of data transmission, which led to an increase in port density and efficient power consumption. This is enough to increase the market growth for low-cost optical transceivers. The surge in demand for low-cost transceivers boosted the market for this segment with offerings from recognized players, such as Broadcom (US) that offers cost-effective SFF optical transceiver modules for data center applications, Lumentum (US) offers SFP+ optical transceiver modules for metro networks, Accelink (China) offers multi-channel 100/400G optical transceivers for datacom application.
The manufacturers of optical transceivers are concentrating more on R&D for serving different applications in the metro network, data center interconnect, long haul applications, and others, which require optical transceivers to be compatible with the complex network. Optical transceiver OEMs such as Fujitsu Optical Components (Japan) and Broadcom (US) are companies offering transceivers that are compact and consume little power. This trend is expected to increase the market growth of small and compact optical modules due to their high range of data connectivity at a faster speed. Hence, it can be said that, due to the reduced package size, accelerated deployment in the datacom and telecom applications and dependency on the already decided standards (IEEE), the strategy of cost leadership and continuous development of smaller and more energy-efficient modules provide large growth potential for the optical transceiver market.
The increase in the communication capabilities of electronic devices, followed by their growing speed of data transfer, has been enabled by optical transceivers. However, as industries are shifting their focus on developing more compact and portable devices, the major issue for optical transceiver manufacturers lies in meeting the changing demands. Manufacturing compact components will help to reduce the complexity of the network as well as the performance penalty. The companies such as Sumitomo Electric Industries (Japan) and II-VI (US) accepted that COVID-19 impacted the sales leading to more demand fluctuations than usual.
As the market is driven by new product and technology development, the optical transceiver manufacturers are investing a certain percentage of their revenue in the R&D of the respective technology. All these factors act as barriers to justify the return on investments due to the uncertain life cycle of developed technology or product, making standardization difficult from the perspective of the application. Transceivers have applicability in various networks, and as the network complexity acts as a restraint for the optical transceiver market, continuous optimization of the component size is a major challenge for the market.

Competition Landscape:
In August 2020, Chengdu Shuhan Technology (China) and InnoLight joined hands together and announced four major application solutions at exhibit CIOE 2020. This included a comprehensive product line for interconnection within and between data centers; optimized solutions for 5G prequels, mid-pass and backhaul; coherent optical communication module; and improved market layout to provide access network high-speed optical device optical modules a full range of solutions. This WK Research market report is designed to help clients improve their market position, and in line with this, this report provides a detailed analysis of several leading optical transceiver companies that include: Broadcom, Lumentum, Sumitomo Electric Industries, Accelink, Smartoptics, Infinera, Fujitsu Optical Components, Hisense Broadband, Huawei, InnoLight, Ciena, Applied Optoelectronics, Amphenol, Intel, NEC, Cisco, NeoPhotonics, Perle Systems, FOCI, Source Photonics, Solid Optics, and Eoptolink.

Segmentation of Optical Transceiver Market:
According to the fiber type, the market for optical transceiver is divided into: Single-mode Fiber and Multi-mode Fiber. Multi-mode Fiber has the largest market share. The multi-mode fiber is the kind of optical fiber that allows the light to travel on many paths simultaneously and is mostly used in communication over short distances, such as inside a building or on campus. Multimode fiber optic cable has a larger core, typically 50 or 62.5 microns, that enables multiple light modes to be propagated. Multi-mode optic fiber cables are generally cheaper since they transmit light using LEDs rather than single-mode fiber optic cables, which employ relatively expensive lasers. Networks made of multi-mode fiber are simpler to operate and maintain. Data is safely transmitted regardless of the number of bends and their radius because multiple wavelengths are transmitted across a multi-mode fiber, which reduces system losses. These are key factors for growth.
According to the application, the market for optical transceiver is divided into: Telecommunication, Datacenters and Enterprises. Datacenters has the largest market share. With the rise of M2M communication, IoT applications are generating a massive amount of new data every minute. This data has to be stored, managed, and retrieved in numerous data centers located around the world. The growing amount of data on the cloud necessitates the development of data centers.

Optical Transceiver Market: Regional Analysis
In terms of geography, the global optical transceiver market has been segmented into: North America, Asia Pacific, Europe, South America, and the Middle East and Africa. Some of the factors boosting the optical transceiver market in APAC are the rising usage of smart devices, a rise in internet users, increased connectivity, expanding network infrastructure and a rise in high bandwidth-intensive applications. APAC has transformed into a global center for significant investments and corporate growth. Additionally, APAC is a major manufacturer and seller of electronics items, including smartphones, wearable technology, home assistants, laptops and personal computers. For internet connectivity, the transceivers are either utilized as an extension or in conjunction with these electronic products. All these factors are driving the growth of the Optical Transceiver industry.

Frequently Asked Questions