The Optical Communication and Networking Market size was valued at USD 26.03 Billion in 2023 and is expected to reach USD 51.48 Billion by 2031 and grow at a CAGR of 8.9% over the forecast period 2024-2031.
Optical communication is any type of communication in which light, rather than electrical current, is used to carry the signal to the remote end, whereas optical networking is a method of communication that uses light-encoded signals to transmit information and data among various nodes of a telecommunications network. Based on data rate, optical communication and networking are divided into three categories: up to 40 GBPS, higher than 40 GBPS to 100 GBPS, and greater than 100 GBPS. Because of the rapid growth of 5G and high-performance services supplied by cloud networks, and providing data security in high-capacity broadband networks, most industries demand more than 100 GBPS.
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The optical communication and network have no speed or bandwidth constraints, are flexible, have little power loss, are very secure, and are immune to electromagnetic interference. Optical networks provide high-speed data transfer using light as optic signals or infrared rays. They are used in a variety of industries, including manufacturing, government, submarines, aerospace and defense, transportation, oil and gas, mining, communications, and healthcare.
KEY DRIVERS:
Increased need for small, energy-efficient transceivers.
Global usage of cloud-based and virtualization services is increasing.
The number of data centers is increasing.
RESTRAINTS:
High initial outlay.
Enhanced network complexity.
OPPORTUNITY:
Telecom infrastructure expansion in emerging economies.
VOIP, LTE, and 5G network deployment and IoT adoption.
Network expansion in poor nations.
CHALLENGES:
Customer demand for portable devices and fast speed is always evolving.
Optical networks are vulnerable to hacking.
Optical fibers’ susceptibility to physical damage and transmission losses.
The COVID-19 epidemic has had a substantial impact on the optical communication and networking equipment sector. Many manufacturers had supply issues at the onset of the epidemic as a result of suspended manufacturing. The market for residential, corporate, and industrial building automation systems has fallen as a result of lockdown measures and the shutdown of non-essential operations. As a result, the production and supply of optical communication and networking equipment are reverting to normal levels. The construction business is projected to see a sharp decline this year as a result of the ongoing COVID-19 crisis. A steady rebound, though, is likely to begin next year. It is also predicted that the building industry would suffer several obstacles, resulting in the COVID-19 crisis and stagnation in many nations. Furthermore, the prolonged crisis is projected to have a significant detrimental influence on the global building industry. However, Europe is expected to see positive growth rates next year, followed by stabilization in 2022.
MARKET ESTIMATION:
In 2022, the optical transceiver category represented most of the optical communication and networking equipment market by component. This expansion is mostly related to the introduction of technological developments such as AI, machine learning, and 5G connectivity, which result in a rise in data traffic, creating a demand for large-scale data centers. During the forecast period, the optical transceiver sector is expected to develop at the fastest CAGR. The increased usage of the internet by smartphones and other connected device users, as well as the adoption of cloud computing as a mainstream IT deployment option, drives up demand for data centers. These factors are projected to enhance the optical transceiver segment's growth in the near future.
The market is divided into three segments based on technology: SONET, WDM, and Fiber Channel. The most market share is held by WDM technology. The causes may be ascribed to the development of ROADM-based WDM networking solutions, which provide clients with quicker and larger transmission capacity networks, boosting demand for this market.
The market is divided into three segments based on application: telecom, data center, and enterprise. The data center application sector is expected to grow at the fastest rate over the projection period. The causes may be ascribed to the rising popularity of cloud computing as a mainstream deployment option, as well as the growing demand for high-speed internet by smartphones and other connected device users, as well as fast growth in internet traffic in mega data centers. This has aided the data center segment's adoption.
In 2022, the BFSI vertical held the greatest proportion of the optical communication and networking equipment market. Optical communication and networking devices are rapidly being utilized in the BFSI industry to safeguard the sensitive data of their clients, satisfy compliance criteria to assure data security, enable security audits, and minimize reputation damage caused by data breaches. As a result, the expansion of the optical communication and networking equipment market is driven by the BFSI sector.
On The Basis of Component
Optical Fiber
Transceiver
Switch
Others
On The Basis of Technology
SONET
WDM
Fiber Channel
On The Basis of Application
Telecom
Data Centre
Enterprise
On The Basis of Industry Vertical
IT & Telecom
BFSI
Military Defense
Oil & Gas
Medical & Healthcare
The North American optical communication and networking industry will rise by 2030 due to the region's high concentration of cloud data centers. The presence of the world's biggest data centers, such as Facebook, Google, and AWS, in the United States, has made it the most attractive market for optical communication and networking. The increasing need for the commercialization of 5G networks is also boosting regional growth. The US government is working on strategic measures to accelerate the adoption of 5G services.
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REGIONAL COVERAGE:
North America
USA
Canada
Mexico
Europe
Germany
UK
France
Italy
Spain
The Netherlands
Rest of Europe
Asia-Pacific
Japan
south Korea
China
India
Australia
Rest of Asia-Pacific
The Middle East & Africa
Israel
UAE
South Africa
Rest of Middle East & Africa
Latin America
Brazil
Argentina
Rest of Latin America
The major key players are Arista Networks, Inc., Cisco System Inc., Fujitsu Optical Components Limited, Huawei Technologies Co., Ltd., Juniper Networks, Inc., Mitsubishi Electric Corporation, NEC Corporation, Nokia Corporation, Telefonaktiebolaget LM Ericsson, ZTE Corporation and Other Players
| Report Attributes | Details |
| Market Size in 2023 | US$ 26.03 Bn |
| Market Size by 2031 | US$ 51.48 Bn |
| CAGR | CAGR of 8.9% From 2024 to 2031 |
| Base Year | 2023 |
| Forecast Period | 2024-2031 |
| Historical Data | 2020-2022 |
| Report Scope & Coverage | Market Size, Segments Analysis, Competitive Landscape, Regional Analysis, DROC & SWOT Analysis, Forecast Outlook |
| Key Segments | • By Component (Optical Fiber, Transceiver, Switch, Others) • By Technology (SONET, WDM, and Fiber Channel) • By Application (Telecom, Data Centre, and Enterprise) • By Industry Vertical (IT & Telecom, BFSI, Military Defense, Oil & Gas, and Medical & Healthcare) |
| Regional Analysis/Coverage | North America (USA, Canada, Mexico), Europe (Germany, UK, France, Italy, Spain, Netherlands, Rest of Europe), Asia-Pacific (Japan, South Korea, China, India, Australia, Rest of Asia-Pacific), The Middle East & Africa (Israel, UAE, South Africa, Rest of Middle East & Africa), Latin America (Brazil, Argentina, Rest of Latin America) |
| Company Profiles | Arista Networks, Inc., Cisco System Inc., Fujitsu Optical Components Limited, Huawei Technologies Co., Ltd., Juniper Networks, Inc., Mitsubishi Electric Corporation, NEC Corporation, Nokia Corporation, Telefonaktiebolaget LM Ericsson, ZTE Corporation |
| Key Drivers | • Increased need for small, energy-efficient transceivers • Global usage of cloud-based and virtualization services is increasing |
| Market Opportunity | • Telecom infrastructure expansion in emerging economies • VOIP, LTE, and 5G network deployment and IoT adoption |
Ans: - The Optical Communication and Networking market size was valued at USD 23.64 Bn in 2022.
Ans: - Increased need for small, energy-efficient transceivers and global usage of cloud-based and virtualization services is increasing.
Ans: - The segments covered in the optical communication and networking market report for study are on the Basis of Component, Technology, Application, and Industry Vertical.
Ans: - The Optical Communication And Networking Market is growing at a CAGR of 8.12% over the forecast period 2023-2030.
Ans: - The major key players are Arista Networks, Inc., Cisco System Inc., Fujitsu Optical Components Limited, Huawei Technologies Co., Ltd., Juniper Networks, Inc., Mitsubishi Electric Corporation, NEC Corporation, Nokia Corporation, Telefonaktiebolaget LM Ericsson, ZTE Corporation.
Table of Contents
1. Introduction
1.1 Market Definition
1.2 Scope
1.3 Research Assumptions
2. Research Methodology
3. Market Dynamics
3.1 Drivers
3.2 Restraints
3.3 Opportunities
3.4 Challenges
4. Impact Analysis
4.1 COVID-19 Impact Analysis
4.2 Impact of Ukraine- Russia war
4.3 Impact of ongoing Recession
4.3.1 Introduction
4.3.2 Impact on major economies
4.3.2.1 US
4.3.2.2 Canada
4.3.2.3 Germany
4.3.2.4 France
4.3.2.5 United Kingdom
4.3.2.6 China
4.3.2.7 Japan
4.3.2.8 South Korea
4.3.2.9 Rest of the World
5. Value Chain Analysis
6. Porter’s 5 forces model
7. PEST Analysis
8. Optical Communication and Networking Market Segmentation, by Component
8.1 Optical Fiber
8.2 Transceiver
8.3 Switch
8.4 Others
9. Optical Communication and Networking Market Segmentation, by Technology
9.1 SONET
9.2 WDM
9.3 Fiber Channel
10. Optical Communication and Networking Market Segmentation, by Application
10.1 Telecom
10.2 Data Centre
10.3 Enterprise
11. Optical Communication and Networking Market Segmentation, by Industry Vertical
11.1 IT & Telecom
11.2 BFSI
11.3 Military Defense
11.4 Oil & Gas
11.5 Medical & Healthcare
12. Regional Analysis
12.1 Introduction
12.2 North America
12.2.1 USA
12.2.2 Canada
12.2.3 Mexico
12.3 Europe
12.3.1 Germany
12.3.2 UK
12.3.3 France
12.3.4 Italy
12.3.5 Spain
12.3.6 The Netherlands
12.3.7 Rest of Europe
12.4 Asia-Pacific
12.4.1 Japan
12.4.2 South Korea
12.4.3 China
12.4.4 India
12.4.5 Australia
12.4.6 Rest of Asia-Pacific
12.5 The Middle East & Africa
12.5.1 Israel
12.5.2 UAE
12.5.3 South Africa
12.5.4 Rest
12.6 Latin America
12.6.1 Brazil
12.6.2 Argentina
12.6.3 Rest of Latin America
13. Company Profiles
13.1 Arista Networks, Inc.
13.1.1 Financial
13.1.2 Products/ Services Offered
13.1.3 SWOT Analysis
13.1.4 The SNS view
13.2 Cisco System Inc.
13.3 Fujitsu Optical Components Limited
13.4 Huawei Technologies Co., Ltd.
13.5 Juniper Networks, Inc.
13.6 Mitsubishi Electric Corporation
13.7 NEC Corporation
13.8 Nokia Corporation
13.9 Telefonaktiebolaget LM Ericsson
13.10 ZTE Corporation
14. Competitive Landscape
14.1 Competitive Benchmarking
14.2 Market Share Analysis
14.3 Recent Developments
15. Conclusion
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