The global market for optical interconnect is projected to have considerable CAGR during the forecast period.  The major factors that propels the optical interconnect market include growing deployment of data centers, increasing adoption of big data analytics and cloud-based services across the globe. The rise in the demand for cloud-based services is further projected to enhance the demand for optical interconnect services in enterprises that further provide a significant opportunity to the market.  There are various factors that can influence the adoption of optical interconnect by SMEs such as organization competitiveness and management strategies. The SMEs are adopting cloud services to enhance flexibility and scalability of their business performance, and to lower the cost of operations. Moreover, integration of advanced technology such as IoT and AI further provide substantial opportunity to the market.  

 Segmental Outlook  

The global optical interconnect market is segmented based on product type and application. Based on the product type, the market is further classified into connectors, cable assemblies, optical transceivers silicon photonics, and other. The optical transceivers market is projected to grow at a significant CAGR during the forecast period. On the basis of application the market is further segregated into data communication and telecommunication.

 Global Optical Interconnect Market Share by application, 2019(%)

Global optical interconnect market to be driven by data communication

Among application, the data communication segment held a considerable share in the market owing to the significant rise in the deployment of data centers coupled with growing demand of big data analytics Data centers play an imperative role, as most companies and governments rely on them to deliver business value much greater than their costs. Increasing investments in data center IT infrastructure, including spending on storage, virtualization, servers, networking, and security have assisted in the rise of out-sourcing data centers across the globe. Cloud computing and analytics are expected to drive further investments on large data centers which would possibly contribute to the increased demand of optical interconnect. Further, the proliferation of IoT and increasing bandwidth-requirement, high-quality content, has led the service providers increasingly to have a data center of their own. The explosion of data through smartphone, social networking sites, e-commerce companies, and government-initiated projects, have also played an imperative role in the increasing demand for data centers, which offers a huge prospect to the optical interconnect providers.

Regional Outlook 

Geographically, the global optical interconnect market is further classified into North America, Europe, Asia-Pacific and the Rest of the World. Asia-Pacific is estimated to have considerable market growth in the global market during the forecast period. The market growth is attributed to the significant adoption of datacenter services  economies such as China, Japan, India, South Korea, Thailand, and Australia. The increasing internet penetration has increased the concerns associated with data traffic and data security, which in turn, is expected to drive the adoption of optical interconnect technology in the region.

Global optical interconnect Market Growth, by Region 2020-2026

North America to hold a considerable share in the global optical interconnect market

Geographically, North America is projected to hold a significant market share in the global optical interconnect market. Major economies which are anticipated to contribute to the North America optical interconnect market are the US and Canada. The economic strength and well-established technology infrastructure of the North America provides a solid platform for the growth of the market. The high adoption of cloud-based applications in the region has led to a substantial growth in the number of cyberattacks. Increasing number of cyber-attacks along with the increasing internet penetration rate in the region is estimated to be the major factors that are driving the growth of the market. The growth in the cyber-attacks is majorly attributed to the increasing adoption of cloud-based services in the region, as cloud computing platforms are more vulnerable to the cyber-attacks and data leakages. Large database and point of sale systems are targeted by hackers for financial gains. Further, a rise in the number of cyber-attacks and hacker linked with the rival nation that targets government organizations, systems, infrastructures to steal political insights are also very frequent. These are also estimated to have a positive impact on the growth of market 

 Market Players Outlook

The key players in the optical interconnect market contributing significantly by providing different types of products and increasing their geographical presence across the globe. The key players of the market include II-VI Inc., Broadcom Inc., Fujitsu Ltd., Intel Corp., NVIDIA Corp., and others. These market players adopt various strategies such as product launch, partnerships, collaborations, mergers, and acquisitions to sustain a strong position in the market. For instance in March 2020 II-VI Inc., announced the launch of 400G CFP2-DCO pluggable transceivers for high-speed backbone networks and datacenter interconnects. 

The Report Covers

• Market value data analysis of 2019 and forecast to 2026.
• Annualized market revenues ($ million) for each market segment.
• Country-wise analysis of major geographical regions.
• Key companies operating in the global optical interconnect market. Based on the availability of data, information related to pipeline products, and relevant news is also available in the report.
• Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.
• Analysis of market-entry and market expansion strategies.
• Competitive strategies by identifying ‘who-stands-where’ in the market.