Global Active Optical Cable Market to Grow at a CAGR of 28% by 2030

Introduction

Active optical cables serve a critical role in the telecom industry, allowing data to be transmitted at maximum speed with the fewest possible faults. There is a rapid expansion in the world population, necessitating new data centers and internet connection facilities. Effective communication cables, such as active optical cables, are necessary to satisfy this rising network demand. Major benefits of active optical cables are low weight for high port count architectures, small bend radius for easy installations, and low power consumption, enabling a greener environment.

In developed locations such as North America and Europe, active optical cables (AOC) are more common (U.K., Russia, Germany, and France). On the other hand, active optical cables are rapidly gaining favor in developing regions such as Asia-Pacific and LAMEA. China, Japan, and India account for the majority of demand in developing regions.

Market Dynamics

Increase in Investment by Government to Improve Connectivity Driving Active Optical Cable Market Growth

Governments of various regions, including North America, Europe, and Asia-Pacific, are investing significantly in the growth of fiber optic networks. Numerous governments undertake several developments to improve the network infrastructure of their regions, which increases the connectivity within the region, enhancing the business opportunities and raising the standard of living. The advancements in the telecommunications industry have changed the way people communicate and boosted the demand for AOCs.

According to the Economic Affairs Division (EAD), China has invested $11.24 million to establish a cross-border optic fiber cable for high-speed international connection. Improved connectivity in emerging countries is thus expected to generate opportunities for the growth of the active optical cables market in the years to come.

Growing Demand for Active Optical Cables in Data Center to Generate New Opportunities

Active optical cables are primarily used in the data centers to meet the need for increased bandwidth and low power. The data center market also needs a broad portfolio of fiber optic modules to connect switches, servers, and storage, which is accomplished by active optical cable. Therefore, an increase in the number of data center deployments worldwide is one of the key drivers for the market. Organizations invest heavily in data center infrastructure due to the growing demand for advanced technological data centers to store and safeguard valuable information. Therefore, the data center market is expected to augment the demand for AOCs.

Data centers today struggle with major bandwidth capacity challenges arising out of migration from 10Gb/s to 40Gb/s and 100Gb/s and the subsequent increase in visualization and cloud computing requirements. With the increased need to reduce costs, interference, noise, and installation time, high-quality AOCs are being used to ensure stability, reduce air gaps, reflections, and insertion loss.

New AOCs are being developed to function better in difficult situations and to provide stability to assure continuous transmission. These would address the major necessity of round-the-clock data center connectivity. 

Impact of COVID-19

The COVID-19 situation is causing stock market concern, a significant slowdown in the supply chain, a drop in corporate confidence, and an increase in panic among client segments. The pandemic's overall impact affects the manufacturing processes of various industries, including semiconductors and electronics. Trade obstacles are further hampering the demand and supply. As a result of the government's announcements of total lockdown and temporary suspension of industries in several countries, the overall manufacturing process has been harmed.

Increased broadband usage, rising demand for cloud services, and video streaming are all predicted to drive up demand in the wireless communication market.

Furthermore, COVID-19 is likely to fuel the need for digital transformation in the medium to long term, with technologies such as AI, 5G, intelligent edge computing, and IoT for future optimization.

Micron Technology, a U.S.-based chip design and storage solutions company, has announced that it has registered stronger demand from data centers due to the remote-work economy and increased gaming and e-Commerce activity globally.

Automation and the use of Industry 4.0 technologies are projected to accelerate due to the COVID-19 crisis. Remote manufacturing, diagnosis, and maintenance may become standard functions in the future.

Regional Insights

The active optical cable market is segmented into four regions: North America, Europe, Asia-Pacific, and Latin America, Middle East & Africa.

Asia-Pacific is the fastest-growing active optical cable market. The Asia-Pacific active optical cable market is predicted to be worth USD 4,572.89 million by 2030, growing at 28.9% CAGR. The countries dominating the use of AOCs in the Asia-Pacific region include China, Japan, India, and Australia. Moreover, other regions that prominently implement the large-scale use of AOCs include Singapore, Thailand, Malaysia, Indonesia, Taiwan, and Hong Kong.

A major application driving the growth of fiber optics in the Asia-Pacific region is data center, which is expected to grow significantly due to the growing need for high bandwidth in enterprises. The Asian telecom market is moving toward 4G and LTE services for a better and faster supply of video services and high-speed data. The demand for high-performing AOCs has largely increased due to the large-scale deployment of fiber optics networks in Asia-Pacific.

Fiber optics is the fastest growing broadband technology in North America. The telecom service providers in the region implement active optical cables to facilitate the ‘plain old telephone service’ (POTS) across their nationwide networks. They also use active optic cables for the extensive transmission of data signals. The presence of several large enterprises, universities, government organizations, and banks in the region drives the adoption of active optic cables. Inter-building and intra-building networks are implemented by these organizations for secure and reliable transfer of high-speed data within their private networks.

Key Highlights

• The active optical cable market was valued at USD 2,297.30 million in 2021 and is anticipated to generate USD 18,965.30 million by 2030. The market is expected to register growth at a CAGR of 27.50% during the assessment period.
• The global active optical cable market is segmented into technology: InfiniBand, Ethernet, HDMI, DisplayPort, USB, and others. The InfiniBand segment is expected to generate USD 5,998.77 million by 2030 at a CAGR of 24.1% forecast.
• By connector type, the active optical cable market is classified into QSFP, CXP, CDFP, CFP, SFP, and others. The QSFP segment is anticipated to generate USD 8,231.96 million by 2030 at a CAGRof 27.1%.
• The active optical cable market is segmented into data centers, high-performance computing, personal computing, digital signage, consumer electronics, and others. The data center category held the greatest share of the market, with an anticipated value of USD 9,433.17 million by 2030 at a CAGR of 27.2% during the projection period.

Competitive Players

Recent Developments

Segmentation

Market Segmentation

By Technology

• InfiniBand
• Ethernet
• HDMI
• DisplayPort
• USB
• Others

By Connector Type

• QSFP
• CXP
• CDFP
• CFP
• SFP
• Others

By Application

• Data Center
• High-Performance Computing
• Personal Computing
• Digital Signage
• Consumer Electronics
• Others

By Region

• North America
• Europe
• Asia-Pacific
• LAMEA