Optical Communication and Networking Market Size By Component (Optical Fiber, Optical Transceiver, Optical Switch, Optical Amplifier, Optical Circulator), By Technology (Wavelength Division Multiplexing (WDM), Synchronous Optical Network (SONET), Fiber Channel), By Application (IT & Telecom, BFSI, Government & Defense, Healthcare, Retail, Energy & Utilities), COVID-19 Impact Analysis, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2021 - 2027

Industry Trends

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.
 

In Canada, the increasing internet users is supporting the market demand for optical transceivers

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.
 

Various benefits offered by SONET is supporting the optical communication and networking market expansion in the UK region

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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.
 

In China, the IT & telecom segment will dominate the market

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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.
 

North America region is poised to showcase significant growth rate

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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 players operating in the market are emphasizing on upgrading the optical communication and networking solutions

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.
 

The optical communication and networking market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2016 to 2027 for the following segments:

Market, By Component

• Optical Fiber
• Optical Transceiver
• Optical Switch
• Optical Amplifier
• Optical Circulator
• Others

Market, By Technology

• Wavelength Division Multiplexing (WDM)
• Synchronous Optical Network (SONET)
• Fiber Channel

Market, By Application

• IT & Telecom
• BFSI
• Government & Defense
• Healthcare
• Retail
• Energy & Utilities
• Others

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
• Asia Pacific
  • China
  • India
  • Japan
  • Australia & New Zealand
  • South Korea
  • Southeast Asia
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Colombia
• Middle East & Africa
  • Saudi Arabia
  • UAE
  • South Africa
  • Israel