Friday, September 2, 2022

Major Driving Factors for Growth of Optical Communication and Networking Equipment Market

Global optical communication and networking equipment market is estimated at USD 24.2 billion in 2022 and is projected to reach USD 36.6 billion by 2027, growing at a CAGR of 8.6% from 2022 to 2027.

Factors such as Rising adoption of cloud-based and virtualization services globally, growing adoption of data centers, and expansion of telecom infrastructure in developing economies are the major driving factors for the growth of the optical communication and networking equipment market. Moreover, growing focus of market players on filing patents and spending more on R&D activities to create lucrative opportunities in the optical communication and networking equipment market.

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Huawei Technologies Co., Ltd. (China), Cisco Systems, Inc. (US), Ciena Corporation (US), Nokia (Finland), II-VI Incorporated (US), ZTE Corporation (China), ADTRAN Inc. (US), Infinera Corporation (US), ADVA Optical Networking (Germany), and FUJITSU (Japan) are some of the key players in the optical communication and networking equipment market.

The Americas accounted for the largest share of ~40% of the optical communication and networking equipment market in 2021. The Americas has emerged as a major data center and cloud computing hub. It is the largest consumer of optical communication and networking equipment market. Also, the market growth in the region can be attributed to the enhanced application of advanced optical technologies such as quantum optics in aviation, industries, and the commercial sector in the region. Further, high defense spending and the presence of numerous important market players in the US are the key factors supporting the expansion of the market in the region.

The optical transceiver segment accounted for the largest share of ~32% of the optical communication and networking equipment market, by component, in 2021. This growth is mainly attributed to the advent of technological advancements, such as AI, machine learning, and 5G communication, that lead to an increase in data traffic, which creates demand for high-scale data centers. The optical transceiver segment is projected to grow at the highest CAGR during the forecast period. The growing use of the internet by users of smartphones and other connected devices, as well as the adoption of cloud computing as a mainstream IT deployment option, leads to increasing demand for data centers. These factors are expected to accelerate the growth of the optical transceiver segment in the near future.

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