Optical Interconnect Market - By Product Type, By Fiber Mode (Single Mode Fiber, Multi-Mode Fiber), By Distance (Less Than 10 Km, 11km to 100 Km, More Than 100 Km), By Data Rate, By Application & Forecast, 2024 – 2032

Optical Interconnect Market Size

Optical Interconnect Market was valued at over USD 15.5 billion in 2023 and is anticipated to grow at a CAGR of over 13.5% between 2024 and 2032. With the proliferation of data-intensive applications, such as cloud computing, big data analytics, artificial intelligence, and high-performance computing, data centers are facing unprecedented challenges in handling massive volumes of data and delivering fast response times. Optical interconnect technologies offer significantly higher data transfer speeds and lower latency compared to traditional copper-based interconnects, enabling data centers to meet the growing demands for faster, more reliable, and scalable connectivity.
 

For instance, in July 2020, July Vodafone New Zealand collaborated with Ciena Corporation (U.S.) for deploying 800-Gbps data center interconnect between its facilities in Auckland. The fiber network upgrade helped Vodafone manage network requirements in support of its recently launched 5G service. The company’s aim is to leverage Ciena's WaveLogic 5 Extreme (WL5e) coherent optical engine online cards plugged into Vodafone New Zealand's previously fielded Ciena 6500 packet-optical transport platforms. The new capabilities enabled the company to offer transmission rates from 200 to 800 Gbps.
 

The rising technological advancements have propelled optical interconnects to new heights of performance, efficiency, and scalability, driving their adoption in data centers, telecommunications networks, and high-performance computing systems. Continued research & innovations in optical interconnect technologies are expected to further accelerate the evolution of data communication infrastructure and enable the realization of next-generation applications & services.
 

Optical interconnect technologies involve intricate components and sophisticated systems that require specialized knowledge and expertise for design, deployment, and maintenance. Integrating optical interconnect solutions into the existing networks and infrastructure can be complex, requiring skilled personnel and careful planning to ensure compatibility, interoperability, and optimal performance. Companies investing in optical interconnect solutions must prioritize recruiting and retaining skilled professionals with expertise in optical networking technologies to effectively navigate the intricacies of deployment & maintenance.
 

Optical Interconnect Market Trends

The growth of Artificial Intelligence (AI) and Machine Learning (ML) is significantly influencing the optical interconnect industry. AI & ML applications require vast amounts of data to be processed and analyzed in real-time, driving the demand for high-speed, low-latency connectivity solutions within data centers and across networks. Optical interconnect technologies offer the bandwidth, speed, and reliability required to meet the demanding communication needs of AI & ML systems. For instance, in February 2023, Nubis Communications, Inc. launched the first optical engine optimized from the ground up for ML/AI networks. The platform’s combination of record-breaking density and ultra-low power enables customers to build the networks needed to harness the full processing power of their ML/AI clusters.
 

As organizations embrace cloud computing, edge computing, and other data-intensive technologies, the demand for high-bandwidth and dynamic network interconnection solutions is on the rise. This is driven by the need for fast, reliable, and flexible network connectivity to efficiently route traffic between various networks and data centers. For instance, in June 2023, Lumen Technologies announced a new network interconnection ecosystem called ExaSwitch, created in collaboration with Google & Microsoft. This platform empowers organizations with high bandwidth needs to route their traffic dynamically and quickly between networks without third-party intervention.
 

Optical Interconnect Market Analysis

Based on fiber mode, the market is segmented into single mode fiber and multi-mode fiber. In 2023, the single mode fiber segment dominated the market with a share of over 62%.
 

• Specialized fiber optic technologies, such as Single Mode Fiber (SMF), are advancing significantly. These innovations enable seamless upgrades to optical infrastructures, facilitating efficient deployment of 5G networks and enhancing network resilience. For instance, in January 2021, Corning Inc. launched a new fiber offering for telecommunication to build out 5G networks. The SMF-28 contour fiber is available in a standard 242-micron configuration and a smaller 190-micron configuration. The product allows seamless upgrading of optical infrastructures, enabling the cost-efficient deployment of networks as the new fiber offering provides 10 times the microband resilience of G.652.D fibers and seven times the microband resilience of G.657.A1 fibers.
   

Based on application, the market is divided into data communication, telecommunication, and others. The data communication segment is the fastest growing and is anticipated to expand at a CAGR of over 15% between 2024 and 2032.
 

• The rising prevalence of data communication globally is a significant driving force behind the market expansion. As organizations increasingly rely on data-intensive applications, such as cloud computing, big data analytics, artificial intelligence, and IoT, the demand for high-speed, low-latency connectivity within and between data centers is escalating. Optical interconnect solutions offer superior performance, bandwidth, and reliability compared to traditional copper-based interconnects, making them indispensable for modern data center architectures. For instance, in August 2023, Western Digital unveiled its enhanced OpenFlex Data24 3200 NVMe-oF JBOF/storage platform along with the next-generation RapidFlex A2000 and C2000 NVMe-oF Fabric Bridge Devices (FBDs), and the new Ultrastar DC SN655 PCIe Gen 4.0 dual-port NVMe SSD. These storage solutions provide more flexibility and choice for simplifying Non-Volatile Memory Express (NVMe) and Non-Volatile Memory Express over Fabrics (NVMe-oF) deployment for customers. It aims to target both ends of the ethernet wire to deliver solutions where data travels from the server initiator to the storage target.
   

The optical interconnect market in the Asia Pacific region is anticipated to witness a strong CAGR exceeding 15.5% from 2024 to 2032. This growth is underpinned by several factors, including rapid urbanization and population expansion, notably in countries such as China, India, and other Southeast Asian nations. Urbanization drives the need for high-speed internet access, digital services, and connectivity solutions, spurring investments in optical interconnect infrastructure. With the deployment of 5G networks, there is a heightened demand for optical interconnect solutions to support both fronthaul and backhaul network requirements. As a result, the region is experiencing a significant surge in the demand for optical interconnect infrastructure to meet the evolving connectivity needs of businesses, consumers, and emerging technologies.
 

Optical Interconnect Market Share

Coherent Corp and Broadcom Inc. hold a significant share of over 16%. Coherent Corp. provides innovative solutions in the field of optical interconnect technology. With a strong focus on research, development, and manufacturing, the company offers a comprehensive range of optical interconnect products and services tailored to meet the evolving needs of various industries.

Broadcom Inc. is a global technology company renowned for its expertise in semiconductor and infrastructure software solutions. In the realm of optical interconnect, Broadcom plays a significant role in advancing technology and driving innovations in data communication and networking.
 

Optical Interconnect Market Companies

Major players operating in the market are:

• Coherent Corp.
• Broadcom Inc.
• Lumentum Holdings Inc
• Sumitomo Electric Industries, Ltd.
• Synopsys, Inc
• NVIDIA Corporation
• Molex Incorporated
   

Optical Interconnect Industry News

• In September 2022, Molex, global electronics, and connectivity innovator, announced its first-to-market, pluggable module solution for Co-packaged Optics (CPO). Its External Laser Source Interconnect System (ELSIS) is a complete system of cage, optical, and electrical connectors with a pluggable module that uses proven technology to speed the development of hyperscale data centers.
   
• In April 2020, NVIDIA Corporation entered the global market by acquiring Mellanox Technologies, Ltd., a provider of optical interconnects based in the U.S. Through this acquisition, NVIDIA aimed to combine its datacenter and high-performance computing expertise with Mellanox's high-performance networking technologies.
   

The optical interconnect market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2018 to 2032, for the following segments:

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Market, By Product Type

• Optical Transceivers
• Active Optical Cables (AOCs)
• Embedded Optical Modules (EOMs)
• Optical Splitters and Couplers
• Optical Switches and Routers
• Optical Interconnect Connectors
  • LC Connectors
  • SC Connectors
  • ST Connectors
  • MPO/MTO Connectors
• Others

Market, By Fiber Mode

• Single Mode Fiber
• Multi Mode Fiber

Market, By Distance

• Less than 10 Km
• 11km to 100 Km
• More than 100 Km

Market, By Data Rate

• Low Data Rate
• Medium Data Rate
• High Data Rate

Market, By Application

• Data Communication
• Telecommunication
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • ANZ
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA