Global passive optical component market is estimated to witness high growth, owing to increasing demand for fiber optic communication infrastructure & growing deployment of 5G networks
Global passive optical component market is estimated to be valued at US$ 63.42 billion in 2024, exhibiting a CAGR of 16.8% over the forecast period (2024-2031). Increasing demand for advanced fiber optic communication infrastructure and growing adoption of 4G/LTE and 5G technologies can drive the market growth. Furthermore, rising investments by telecom operators for deployment of fiber to the home (FTTH) networks can boost demand for passive optical components.
Market Dynamics:
Growing Deployment of 5G Networks
Rise in mobile data traffic with implementation of advanced technologies like IoT, autonomous vehicles, VR/AR and others prompt telecom operators to expedite the deployment of 5G networks globally. Since 5G requires dense fiberization for backhaul and front haul connectivity, it boosts demand for passive optical components including optical cables, optical power splitters, wavelength division multiplexers and others.
Increasing Demand for Fiber Optic Communication Infrastructure
With rising demand for high bandwidth networks to support applications like video streaming, online gaming, 4k videos, and others, there will be huge need for robust fiber optic communication infrastructure.
Growing Demand for Fiber to the Home (FTTH) Networks
Global passive optical component market growth is driven by rising4 demand for fiber to the home (FTTH) networks. FTTH networks deliver gigabit internet speeds to residential homes using optical fiber instead of traditional copper cables. As more internet and cable TV providers are rolling out FTTH networks worldwide, it boosts demand for passive optical components that form the backbone of these networks. Optical splitters, couplers, attenuators, filters and other such components witness extensive usage in FTTH deployments. Countries like China, Japan, South Korea and many European nations have witnessed massive FTTH rollouts in recent years. This growth will increase as service providers look to meet the rising bandwidth needs of consumers and businesses.
Increasing Adoption of Passive Optical LAN
Global passive optical component market growth is driven by increasing adoption of passive optical LAN (Local Area Network) in enterprises, data centers, universities and other organizations. Passive optical LAN provides 10 Gbps connectivity using optical fiber connectivity instead of traditional copper cables. It offers advantages like lower cabling and maintenance costs, higher bandwidth, simplified network architecture and better scalability. With data usage exploding across industries, organizations are increasingly preferring passive optical LAN over traditional copper networks. This boosts demand for passive optical components like splitters, Wavelength Division Multiplexing, Trans-Antarctic Physical Sciences, coupler and connectors used in passive optical LAN deployments.
Fierce Competition from Active Optical Networks
Global passive optical component market growth can be hampered due to competition from active optical networks. Active optical networks utilize active components like tunable lasers and optical transceivers along with switches. This allows them to provide advanced functionality and flexible bandwidth allocation as compared to passive optical networks. The complexity and initial infrastructure investment required for active optical networks has declined significantly in recent times.
High Initial Deployment Costs
High initial deployment costs associated with passive optical networks can hamper their widespread adoption globally, especially in developing nations. Laying down optical fiber, installing components like splitters, connectors, switches and others requires massive capital expenditure. While the operational costs are lower as compared to copper networks, the upfront costs deter many telecom operators and organizations. This hampers the growth potential of the passive optical component market, as adoption remains limited to developed nations and large enterprises initially. Bringing down the deployment costs through innovative solutions can address this important restraint.
Growing Deployments of PON Technology
Global passive optical component market can witness growth opportunities due to growing deployments of PON (Passive Optical Network) technology worldwide. PON utilizes a point-to-multipoint architecture to deliver fiber connectivity without any active components inside the operator's central office. Global PON port shipments will increase as service provider’s focus on large-scale fiber rollouts. This widespread adoption of PON technology can boost demand for passive optical components used in building out these networks.
Rising Investments in Fiber Connectivity to Drive Replacements & Upgrades
Global passive optical component vendors can witness growth opportunities due to rising investments by governments and telecom operators in upgrading existing copper and coaxial cable infrastructure to fiber connectivity. Many nations have launched ambitious national broadband plans focusing on fiber to the home and business. This will necessitate replacing or upgrading millions of kilometers of old infrastructure with optical fiber cables and passive component systems. As periodic maintenance and replacements are required, it boosts demand and recurring revenue for passive optical component manufacturers globally.
Link - https://www.coherentmarketinsights.com/market-insight/passive-optical-component-market-4416
Key Developments:
- In November 2023, Sumitomo Electric Industries, Ltd., a global leader in advanced materials and connectivity solutions, enhanced its manufacturing facility to boost production capacity for optical components. This expansion aligns with the company's strategy to address the increasing demand for high-performance optical technologies crucial for telecommunications and data transmission applications. By upgrading its production capabilities, Sumitomo Electric Industries, Ltd. aims to solidify its market position in optical components and support ongoing advancements in communication infrastructure.
- In January 2023, Telekom Research and Development Sdn Bhd (TM R&D), the innovation division of Telekom Malaysia Berhad (TM), a leading telecommunications provider in Malaysia, entered into a Memorandum of Understanding (MoU) with ZTE Corporation Sdn Bhd, a global information and communications technology solutions provider. The agreement is set to facilitate joint research into passive optical network technologies, aiming to introduce 50Gbps broadband capabilities to Malaysia.
- In December 2022, Motorola Solutions, a global leader in public safety and enterprise security solutions, revealed its acquisition of Rave Mobile Safety, a Massachusetts-based provider of cloud-based mass notification and incident management platforms. Rave's technology aids organizations and public safety agencies in communicating and coordinating during emergencies, allowing users to send alerts and updates about health crises, lockdowns, and evacuations to keep people informed and safe.
- In August 2022, Huawei Technologies, a leading global provider of information and communications technology (ICT) solutions, collaborated with several telecom operators to implement advanced passive optical networks (PON). This partnership aims to enhance broadband connectivity and optimize network performance across various regions. By utilizing Huawei's cutting-edge optical technologies, the collaboration is expected to support the rollout of high-speed internet services, catering to the rising demand for digital communication and connectivity in both urban and rural areas.
Key Players:
Corning Incorporated, Fujikura Ltd., Sumitomo Electric Industries, Ltd., NTT Electronics Corporation, Huawei Technologies Co., Ltd., ZTE Corporation, CommScope Holding Company, Inc., TE Connectivity Ltd., Molex LLC, 3M Company, Adtran, Inc., OFS Fitel, LLC, Prysmian Group, Leviton Manufacturing Co., Inc., and Sterlite Technologies Limited
