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Optical Communication and Networking Market size was valued at USD 18 billion in 2020 and is expected to grow at a CAGR of over 5% between 2021 and 2027. The market growth is attributed to the growing internet traffic and increasing demand for reliable internet connectivity across the globe. The rising development of new innovative technologies, such as IoT and Artificial Intelligence (AI), is enabling the need for faster internet communication standards. Traditional internet wires (co-axial cables) offer internet connectivity at a peak speed of 45 Megabits/second (45Mbps), whereas optical fibers offer speeds of 100 Gigabits/second (100,000 Mbps). The optical connectivity solutions provide resistance to electrical interference (storms, lightning), making them ideal for AI and IoT applications.
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The supply chain disruptions in the first quarter of 2020 credited to the pandemic negatively impacted the demand for optical communication and networking components. The growing demand for reliable internet connectivity due to rising work-from-home trend helped the optical communication and networking market to recover after the second quarter of 2020.
Report Coverage | Details |
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Base Year: | 2020 |
Market Size in 2020: | 18 Billion (USD) |
Forecast Period: | 2021 to 2027 |
Forecast Period 2021 to 2027 CAGR: | 5% |
2027 Value Projection: | 30 Billion (USD) |
Historical Data for: | 2016 to 2019 |
No. of Pages: | 250 |
Tables, Charts & Figures: | 290 |
Segments covered: | Component, Technology, Application and Region |
Growth Drivers: |
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Pitfalls & Challenges: |
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In Canada, optical transceiver held 30% of the market share in 2020 led by the growing number of internet users in the country. The upsurge in the number of internet users is enabling the rise of data traffic across the country. The growing data traffic is enabling the need for data storage services, making data centers to upgrade their network infrastructure. The growing demand for IoT devices across the country is another factor supporting the industry growth.
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In the UK, Synchronous Optical Network (SONET) technology is projected to witness 5% growth rate through 2027 impelled by the growing industry demand for optical communication and networking services. SONET technology offers various benefits for optical communication and networking such as low attenuation, smaller diameter, lightweight structure, high bandwidth, and long-distance transmission. The reduced capital expenditure due to low equipment investment required for SONET technology is another factor supporting the industry progression. High flexible architecture offered by SONET technology is supporting many optical communication and networking applications across various industry verticals.
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In China, the IT & telecom sector in the optical communication and networking market held the largest revenue share in 2020 credited to the growing demand for cloud data center across the country. The rising adoption of optical fiber network across data centers for handling massive data traffic is driving market progression across the IT & telecom sector. The telecom sector will massively adopt the optical fiber owing to increasing the cellular internet penetration to handle the load on telecom providers. The growing BYOD trend across IT companies is supporting the demand for optical communication and networking components.
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North America optical communication and networking market size will reach USD 7 billion by 2027 on account of the large concentration of cloud data center across the region. The leading data centers of Facebook, Google, and AWS located in the U.S. are making it the most lucrative market for optical communication and networking. The growing demand for the commercialization of 5G network is also supporting the regional growth. The government authorities in the U.S. are focusing on strategic initiatives for early acceptance of 5G services.
Major companies functioning in the optical communication and networking market are ADTRAN, Inc., ADVA Optical Networking, Arista Networks, Broadcom Inc., Ciena Corporation, Cisco Systems, Inc., Corning Incorporated, FiberHome, Finisar Corporation, Fujitsu Limited, Huawei Technologies Co., Ltd., Infinera Corporation, Juniper Networks, Inc., Lumentum Operations, Mitsubishi Electric, NEC Corporation, Nokia, Sumitomo Electric, Telefonaktiebolaget LM Ericsson, and ZTE Corporation. The industry leaders are emphasizing on upgrading their optical networking solutions to gain a competitive advantage in the market.
Market, By Component
Market, By Technology
Market, By Application
The above information has been provided for the following regions and countries: