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Optical communication, networking equipment market worth $36.6 billion by 2027

According to Markets and Markets report the market was estimated at USD 24.2 billion in 2022 and is projected to reach USD 36.6 billion by 2027, growing at a CAGR of 8.6% during the forecast period. Rising adoption of cloud-based and virtualization services globally and expansion of telecom infrastructure in developing economies are the major driving factors for the growth of the optical communication and networking equipment market.

By application: Data Centre application in optical communication and networking equipment to propel market growth in 2021
The data center application accounted for the largest share of the optical communication and networking equipment market in 2021. This growth in the market is due to factors such as the transition toward cloud storage and increasing technological developments, including machine learning, artificial intelligence, and deep learning, which, in turn, increase the data traffic across networks, which create demand for high data rate transceivers, switches, and amplifiers for efficient data communication. Also, leading cloud service providers such as Google (US), Amazon (US), and Microsoft (US) are implementing high data rate transceivers in their data centers.

Increasing technology areas of WDM technology to accelerate demand for optical communication and networking equipment’s
WDM technology-based optical communication and networking equipment accounted for the largest market share of ~69% in 2021. The development of ROADM-based WDM networking solutions is one of the emerging trends in the global optical networking and communications market. Key factors for the growth of WDM technology are higher bandwidth, easy configuration, better security, and duplex transmission. Owing to this, WDM technology is expected to continue to hold the largest market share during the forecast period.

Asia Pacific likely to emerge as the fastest optical communication and networking equipment market during the forecast period
Asia Pacific is projected to grow at the highest CAGR ~11% during the forecast period. The Asia Pacific region is the largest producer and consumer of smartphones, laptops, TVs, and various other data-generating devices across the world. This leads to high demand for internet in the region, thereby propelling the growth of the optical communication and networking equipment market. In addition, the growing demand for computing applications, as well as the increasing demand for compact and energy-efficient modules, is pushing the market forward. The market will benefit from the growing focus on 5G networks and the rising demand for high data transfer capabilities.

CT Bureau

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