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Market Trends for Optical Interconnection Hardware in 2023
2016-08-23
Type Of Definition

According to a report named “Optical Network Hardware Tracker” provided by IHS, a research company, the year of 2022 is a year of harvest to many vendors in optical communication industry. Driven by the whole industry, optical interconnection hardware market increased in 2022, although it has the most fierce competition. However, will this tendency be kept in 2023 for optical interconnection hardware market? Insight of 2023 optical interconnection market will be offered in this article.

2016 market trends

Where There Is Need There Is Market

In the past year, the growth of optical interconnection is largely driven by the increasing needs for higher Ethernet speed. Behind these needs are the widespread of advanced technologies and applications like Cloud, Internet of Things and virtual data center. The wide deployment of FTTx and 4G network are also great drivers of optical interconnection market increasing. In 2023, the applications of the advanced technology and deployment of fiber optic network will obviously still be biggest driver of the optical interconnection hardware market. The main characteristics of 2023 optical interconnection hardware market can be concluded by the three keywords: high speed, compatible and high density.

High Speed

It has been clearly proved in the past years that only higher speed Ethernet like 40G or 100G can keep up with the growing needs. Some large data centers have already switched to 40G and 100G in the past years, although it has not yet been widely applied. However, according to research by IHS, 40G and 100G will be the key growth segment of the market in the coming years, and 2023 might be the breakout year of 100G technologies. The following picture shows the prediction of global revenue from 2022 to 2028. The 100G market is supposed to grow 262 percent from 2022 to 2028. For optical interconnection hardware market, sales of 100G hardware market will also increase largely. Cozlink leading providers in optical communication has already launched 100G interconnection products, like 100G transceivers and DAC (direct attach cable).

IHS report

Compatible

Many data centers slow down 40/100G migration plan because of the cost. For example, almost every data center needs optical transceivers and DAC for interconnection. And these products must be compatible from the switches. However, the switch market has already been monopolized by large vendors like Cisco. And the original brand 100G optical transceivers and DACs are usually very expensive. Luckily, vendors like Cozlink can provide full series optical transceivers with a lifetime warranty, fully compatible with networking kit. What’s more these products are much cheaper than the original brand ones and have the same performance. These third party transceivers offer customers more choices with lower prices, which is very likely to promote the optical interconnection market, especially, for 100G products.

High Density

Even price for high data rate products will decrease in 2023, there are still various problems to be solved for optical interconnection. Higher Ethernet speed depends means more cables and devices, which becomes an urgent problem in data center where the space is limited. Enlarging the size of data center is a method. However, there is an economical method for many data centers in interconnection, which is increasing the cabling density and port density. Vendors satisfy the market needs by providing small form factor optics, high density network rack system and MPO products. In 2023, Cozlink innovatively provides high density LC and MPO patch cords with push-pull tabs which can increase the cabling density and flexibility effectively. High density is the irreversible trend for both data center and optical interconnection hardware market.

Where There Is Market There Is Competition

Three most obvious trends of optical interconnection hardware market will be high speed, compatible and high density. Meanwhile, promoted by the increasing need for higher Ethernet speed, 2023 optical interconnection hardware market is very likely to keep the tendency of 2015. However, except opportunities, the competition in optical interconnection market will be fiercer. More vendors want to share the big cake of optical interconnect hardware market. By providing fully tested products and the most reasonable price of optical interconnection products, Cozlink is ready and willing to face the challenges and opportunities in 2023.

What is Optical Interconnection?

Optical interconnection is the most promising candidate for providing a solution for the hard-wired deadlock. In terms of linkages using optical means, optical fiber communication has been in practical use for more than twenty years, mainly for long distance links between cities and continents. In contrast, there has not been a strong need for short-reach optical links. However, as the problems associated with hard-wired links become more apparent, this approach is gathering new focus. The term “optical interconnection” is often called simply “optical wiring” or “optical interconnect” and can be interpreted in the broadest sense of the word as “any interconnection using optical means.” As this article focuses on its applications in ultra high - speed computers, we define “optical interconnection” as short-reach links between chips and instruments within several tens of meters, and make a clear distinction between short- and long-distance links.

Future Challenges

As has been discussed, optical interconnects can provide a viable approach in order to address the need for high-performance networking inside data centers, by providing high throughput, low latency, and reduced energy consumption. Thereare, however, remaining challenges that need to be addressed for optical interconnection net-works to be widely adopted by data center operators.

Future Directions

Need for a strategic roadmap
With continual and consistent planning,or a strategic roadmap, it will be able to position elemental technologies, such as optical interconnection, in the grand perspective of a long-range strategy. This will enable a long-range, steady development effort, without losing focus as can occur in an isolated project, to foster optical interconnection as one of the core technologies required to realize the next generation supercomputer system, even more advanced computing and ultra high-capacity routers.
Strategic arrangements for the future
Incorporation of optical interconnection is also under review for mobile phones and automobiles. Although they do not require ultra high-speed processing, the merits of optical links, such as the elimination of wiring space and  EMC-less communication, are of great advantage in these applications. Robotics is an area where the possibility of explosive growth in the near future is high. Optical interconnection has the  promise to be used as a key component in the nervous system of these robots, transmitting information calculated in the brain (CPU) to the corresponding human’s muscles and limbs. Achievements that result from this cutting-edge technological development will find a broad spectrum of applications.
 

What is the market size of optical interconnect?


The Optical Interconnect Market size is estimated at USD 15.15 billion in 2023, and is expected to reach USD 28.10 billion by 2028, growing at a CAGR of 13.15% during the forecast period (2023-2028).

North America To Witness High Market Growth

  • The rapid penetration of the internet is expected to raise the growth of the market in this region. Moreover, according to Cisco Systems, the cloud traffic in 2021 is estimated to be around 6844 exabytes per year in North America, which is highest in comparison to other regions. According to the November 2020 edition of the Ericsson Mobility Report, North America was expected to end 2020 with about 4% of its mobile subscriptions being 5G. Hence, such trends create scope for the market, as a powerful interconnect is required to enable cell towers and other applications to handle 5G transmissions.

  • Also, North America has various players that provide optical interconnect products and solutions, along with players who are also keen to innovate new solutions for the improvement in interconnect bandwidth density at around 10x lower power. For instance, in March 2020, Ayar Labs announced that it had received a strategic investment from Lockheed Martin Ventures, where the funds will be used to accelerate the commercialization of Ayar Labs’ patented monolithic in-package optical I/O (MIPO) solution for applications that require high bandwidth, low latency, and power-efficient short-reach interconnects.

  • Moreover, data movement within the data center is becoming a critical feature, and the rise in the ample of new businesses leveraging data center services in the United States, and Canada will leverage more machine-to-machine (M2M) traffic. To overcome this problem, IBM focuses on providing optical switches in the data center as a key to resolve the problem. IBM is undertaking to build reconfigurable optical switches using silicon-photonic technology. If implemented, this optical solution becomes a new trend in the optical interconnect market.

  • In June 2020, Equinix Inc., the global interconnection and data center company, announced its agreement to purchase a portfolio of 13 data centers across Canada from BCE Inc for USD 750 million in an all-cash transaction. The 13 data center sites representing 25 Bell data center facilities are likely to generate approximately USD 105 million annualized revenue.

Related Reports:

The optical switches marketis estimated to grow at a CAGR of 11.38% between 2022 and 2027. The size of the market is forecasted to increase by USD 4,896.63 million. This report extensively covers market segmentation by application (data communications, telecommunications, and others), type (large enterprise and SMEs), and geography (APAC, North America, Europe, Middle Eastand Africa, and South America).

The passive optical LAN marketsize is expected to increase by USD 21.85 billionfrom 2021 to 2026, and the market's growth momentum will accelerate at a CAGR of 17.10%. This report extensively covers passive optical LAN market segmentation by component (optical line terminal, optical splitter, and optical network terminals) and geography (APAC, North America, Europe, South America, and MEA).

 

 

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