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Active Optical Cable Market Globally Expected to Drive Growth through 2022-2030
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As per the Market Statsville Group, the global active optical cable market size is estimated to grow USD 17,078.2 million by 2030 from USD 2,297.3 million in 2021, at a CAGR of 28.5% from 2022 to 2030. The global active optical cable market increased revenue is due to the increased adoption across various regions on its advantages over other communication cables. Information is transmitted through optical cables using light that has been reflected due to total internal reflection. The global active optical cable market is rapidly expanding and replacing copper wires; further advances in optical fiber technology are expected to increase the use of active optical cables.
Factors such as an increase in bandwidth requirements, huge data center deployments, and the rise in virtualization and cloud-based service adoption drive the global growth of the active optical cable market. However, the high implementation cost of AOCs and vulnerability to physical damage and transmission losses are expected to restrain the market growth. Improved connectivity in emerging countries and advancements in fibre optics technology are expected to create lucrative market growth opportunities in the coming years.
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Global Active Optical Cable Market Definition
An active optical cable (AOC) is a cabling technology that uses optical fiber between the connectors to improve the cable’s performance. AOC is becoming more popular as a replacement for copper cables due to its numerous benefits, including a small bend radius for easy installation, low power consumption, and light weight.
Global Active Optical Cable Market Covid-19 Impact
Both consumers and the economy are being impacted by COVID-19. Electronic manufacturing hubs have been temporarily shut down to stop the spread of COVID-19 among individuals. This has had a major impact on the semiconductor industry's supply chain, resulting in shortages in material, component, and finished goods. The active optical cable industry is expected to face financial disruptions due to a lack of business continuity, which has resulted in significant negative impacts on revenue and shareholder returns.
The global economy has experienced a surge in demand for cloud/data center services and cloud infrastructure to support distributed workforce. Growth in the adoption of 5G networking by corporate individuals due to growing online presence has been a national priority and is opportunistic for the market. However, the slowdown in productions by OEMs and the reduction in demand for mobile phones and other consumer electronics slightly pulled down the market for actuators and valves. Shortages of critical components and materials have significantly impacted the global supply chains. In addition, reduction in capital budgets and delay in planned projects in various end-use industries hampered the global economy.
Global Active Optical Cable Market Dynamics
Drivers: Increase in transition toward faster optical networks by the telecom sector
Telecommunication has improved radically due to its huge impact on the everyday life of customers. The telecom sector is adopting optical networks to support faster connectivity with optimized errors. Numerous telecom companies such as Airtel, Telstra, and China Telecom utilize optical cables for communication. In addition, higher bandwidth is used, due to which a large amount of data can be transmitted without any interruption. Therefore, the demand for optical networks in the telecom industry is expected to drive the global active optical cable market.
Restraints: High initial investment
The high initial investment of active optical cable hampers the growth of the active optical cable market at present. Embedded technologies, such as small form factors, optical transceivers, and ambient light sensors, are beneficial to transmit information to optical cables and reduce interrupts. Hence, the high cost of these technologies drives the implementation cost of AOCs. Optical cables are more expensive than conventional copper cables due to their high reflective material and transceivers such as SDH, ONT, and CPRI. High initial investments, thus, constrain the acceptance of active optical cables.
Opportunities: Advancements in fiber optic technology
Advanced semiconductors are used to upgrade fiber optic communications. Numerous technologies such as polymer optic fiber, high altitude platforms, laser neural network nodes, and intelligent optical transmission networks optimize the error and generate a secured network. The advancement in wireless technology, such as 3G, 4G, and 5G, creates an opportunity for active optical cables to ensure quicker access and affordable connectivity.
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Global Active Optical Cable Market Segmentation
The study categorizes the active optical cable market based on technology, connector type, and application at the regional and global levels.
By Technology Outlook (Sales, USD Million, 2017-2030)
By Connector Type Outlook (Sales, USD Million, 2017-2030)
By Application Outlook (Sales, USD Million, 2017-2030)
- Data Center
- High-Performance Computing
- Personal Computing
- Digital Signage
- Consumer Electronics
By Region Outlook (Sales, USD Million, 2017-2030)
- North America (US, Canada, Mexico)
- South America (Brazil, Argentina, Colombia, Peru, Rest of Latin America)
- Europe (Germany, Italy, France, UK, Spain, Poland, Russia, Slovenia, Slovakia, Hungary, Czech Republic, Belgium, the Netherlands, Norway, Sweden, Denmark, Rest of Europe)
- Asia Pacific (China, Japan, India, South Korea, Indonesia, Malaysia, Thailand, Vietnam, Myanmar, Cambodia, the Philippines, Singapore, Australia & New Zealand, Rest of Asia Pacific)
- The Middle East & Africa (Saudi Arabia, UAE, South Africa, Northern Africa, Rest of MEA)
The InfiniBand segment accounts for the largest market share, by technology
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By technology, the active optical cable market is segmented into InfiniBand, Ethernet, HDMI, DisplayPort, USB, and others. In 2021, the InfiniBand segment had the largest market share of 37.4% in the global active optical cable market. InfiniBand is an interconnection technology with peripheral devices such as servers, hub, and network switchers that support high speed and low latency data transport. InfiniBand's are bidirectional serial buses that transmit and receive the information simultaneously.
InfiniBand protocols are widely used protocols in AOCs. They are scalable, support quality of service (QoS), and are highly efficient compared to other protocols. The interface of the protocol in commercial applications such as data centers and HPCs plays a key role in its market growth. Over five years, the InfiniBand interface has moved from the traditional form factors such as the 10G QSFP+ format to the 14G FDR QSEP+ fiber optic cables, increasing data transmission rates.
Asia Pacific accounts for the fastest-growing region
By region, the market is analyzed across North America, Asia-Pacific, Europe, South America, and the Middle East & Africa. Globally, Asia Pacific is projected to hold the highest CAGR of 30.6% during the forecast period. Asia-Pacific is analyzed across China, Japan, India, Australia, and the Rest of Asia-Pacific. Asia-Pacific is projected to witness the fastest growth rate, owing to increasing requirements of connectivity improvement and growing usage of 3G/4G/5G services in countries such as China and Japan.
The demand from countries such as China and Japan is on the rise due to the requirements of connectivity improvement and the increase in usage of 4G/5G services. Stiff competition in the market, arising from several vendors, has resulted in new product development and innovative solutions. Service providers are now exploring new technologies to enhance their offerings and gain a larger market share.
Key Market Players
Key players in the active optical cable industry include 3M Company, International Business Machines Corporation (IBM), Finisar Corporation (Ii-Vi Inc.), Amphenol Corporation, Avago Technologies Limited (Broadcom Inc.), Fujitsu Limited, Lumentum Holdings Inc., Siemon Company, Molex, Llc, and Sumitomo Electric Industries, Ltd.
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The global active optical cable market is highly competitive, owing to the strong presence of existing vendors. Vendors of AR/VR smart glasses technology with extensive technical and financial resources are expected to gain a competitive advantage over their competitors by being able to meet market demands. With more technological innovations, product extensions, and different strategies adopted by key vendors, the competitive environment in this market is expected to become more intense.
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