“Revenue generated by optical transceivers reached around US$7.7 billion in 2019 and is expected to more than double to around US$17.7 billion by 2025 at a CAGR for 2019-2025 of 15%” asserts Martin Vallo, PhD, Technology & Market Analyst Solid-State Lighting technologies, within the Photonics, Sensing & Display division at Yole Développement (Yole). “This growth will be driven by high volume adoption of expensive high data rates including 400G and 800G, modules by big cloud service operators. Therefore, such players invest more and more in new datacenters and top of that telecom operators have also increased their investments into the 5G networks that use wireless optical transceivers”.
High demand from datacenter and telecom operators have been confirmed as follows:
• The datacom market growth, about 20% CAGR between 2019 and 2025, will be driven by the adoption of expensive higher data rate optical modules which migrate from core/spine networks down to inter-rack connections.
• The revenue growth of telecom optical modules will be driven by coherent technologies for DCI optical transport solutions and 5G optical transceivers deployment in Asia. Yole’s analysts announce 5% CAGR during this period.
• The sharp difference in growth revenues is caused by lower sales expectation in 2020 due to the COVID-19 pandemic.
In addition, the total revenue is expected to moderately increase in 2020 with the effect of the pandemic. Indeed, COVID-19 is naturally affecting telecommunications globally and sales of optical transceiver modules. However, demand for optical modules by data-center operators is very strong in China, pushed by the local government. Its strategy is mainly focused on the 5G deployment and the development of cloud data centers.
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