Market Challenges And Opportunities

Global Optical Transceiver Market Drivers:

Rise in need for advanced communication to fuel the market pace

The bearer network are advancing and upgrading, which is likely to create demand for optical communication network equipment for increasing as 5G technology is progressing and base stations are being deployed. As per the Ericsson’s mobility report, the LTE networks and fixed broadband subscription penetration has increased rapidly from 2019, and this trend is likely to continue in the near future. As per the report, by 2024, the fixed broadband connection is anticipated to grow by 3% year on year growth. This is in turn expected to augment growth of the global optical transceiver market over the forecast period.

Growing demand for cloud-based services to boost the market growth

There is a significant increase in data center traffic in recent years due to booming cloud applications such as machine learning (ML), artificial intelligence (AI), virtual reality (VR), and augmented reality (AR) and Ethernet turning to 400GE/800GE era. Cloud data centers are focusing on improving interconnect bandwidth, due to which the demand for optical transceivers is growing. Cloud data centers are known to be the basis of infrastructure of cloud computing network. Due to the growth of cloud computing sector, the number data centers around the world has increased significantly. These massive cloud data centers are further boosting the need for optical transceivers. This is thus expected to propel growth of the global optical transceiver market during the forecast period.

Global Optical Transceiver Market Restraints:

Growing complexity of networks to impede the market growth

Optical transceivers are commonly utilized with laser diodes and signal decoders. The operation of the transceivers depends on optical pulses that are generated by laser diodes and electric signals that signal decoder processes between the receiver and transmitter. Fiber optic devices and lines are compatible with this process; however, several data centers possess copper-based networking devices, which are not compatible with fiber optic transmission. This in turn increases complexity of networks, which is further likely to hinder growth of the global optical transceiver market over the forecast period.

Adverse situations resulting from COVID-19 pandemic to obstruct the market growth

The COVID-19 pandemic affected many countries around the world, following which several countries imposed stringent regulations. Due to disrupted semiconductor supply chain and restriction on international imports, the hardware manufacturers faced production constraints. Furthermore, several vendors witnessed negative impact of the pandemic in terms of declined revenue. Thus, such adverse situations arising due to the pandemic are expected to hinder growth of the global optical transceiver market during the forecast period. However, the market is likely to regain growth, as the pandemic situation goes back to normal.

Global Optical Transceiver Market Opportunities:

Ever growing demand for digital services is likely to bring several growth opportunities in the global optical transceiver market during the forecast period. Data communications is now a major factor of advanced civilization. Optical fiber networks have proven to be promising in transmitting data over global distances and deliver at an enormous scale in order to cater the constantly growing demand for digital services around the world. The constant demand for data, along with deployment of 5G, requires development of ultra-wide bandwidth optical amplifiers, modulators, as well as optical fibers. Thus, this in turn is likely to be a lucrative opportunity for market players in the coming years.

Growing innovations are also expected to offer multiple growth opportunities in the global optical transceiver market during the forecast period. Innovations such as photonic integrated circuits (PICs) are driving the demand for optical transceivers. PICs consists numerous optical functions only on one chip of few millimeters square. These integrated devices are important for operating the current cloud-based internet activities. This in turn creates strong demand for optical transceivers. Thus, the market is likely to witness various growth opportunities in during the forecast period.