Active Optical Cable Market Size, Share & Trends Analysis Report 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, Consumer Electronics, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global active optical cable market size was worth USD 2,297 million in 2021. It is estimated to reach an expected value of USD 18,965 million by 2030. The market is anticipated to grow at a CAGR of 28% during the forecast period (2022–2030).

An active optical cable (AOC) is a cabling method that improves the cable's efficiency by using optical fiber among the connections. These optical cables are widely used in high-speed monitoring and data technologies, avionics ground stations, avionics system integrators, and other purposes since they are ruggedized. The active optical cable business is being driven by rising bandwidth needs, massive data center installations, and the growing use of digitalization and cloud-based services. The industry, on the other hand, confronts substantial challenges, such as high AOC operational cost and sensitivity to physical deterioration and distribution losses. Furthermore, improved connectivity in developing countries, as well as advancements in fiber optics technology, are expected to help the market.

One of the main factors propelling the market expansion is the rising demand for consumer electronics around the world. In accordance with this, the shrinking of consumer devices that offer high-quality video resolution displays is promoting the market expansion by raising demand for lightweight and thinner built active optical cables. A significant boost to the market's growth is also being provided by numerous technological developments, such as the introduction of network-function virtualization (NFV) and software-defined networking (SDN), which help to reduce network power consumption and provide longer life cycles for network hardware.

The global active optical cable market is segmented based on technology, connector type, applications, and regions. 

Market Dynamics

Market Drivers

• Telecom Industry is Making Greater Move to Improve Optical Networks

As a consequence of its enormous impact on customers' daily lives, the communication system has markedly improved. Optical networks are being adopted by the telecom industry to support faster communication with reduced mistakes. A number of telecommunications companies, particularly Airtel, Telstra, and China Telecom, utilize optical cables.

In addition, more bandwidth is used, allowing for the continuous transfer of massive volumes of data. As a consequence, the telecom industry's need for optical networks is projected to fuel the worldwide active optical cable market. For video and data transfers between inputs and displays over longer or shorter distances, active optical cables transform electrical signals to optical signals. As a consequence, active optical cables are widely employed in 4K/8K/10K video, augmented and virtual reality, and other applications.

• Increase in Demand for Higher Bandwidth

The necessity for communication technologies in AOCs has increased as the demand for higher bandwidth has increased. Companies have produced new fiber optic technologies that drastically enhance bandwidth. Multiple pieces of data can be transferred at the same time with a minimal delay with this innovation. Moreover, Avago, Finisar, and Sumitomo are among the businesses focusing on increased bandwidth in AOCs. Furthermore, the data-carrying signal's hue and wavelength have been increased, resulting in increased bandwidth. Optical fiber has a bandwidth of 2.5 GB per second, which is substantially higher than copper. As a result, the worldwide active optical cable market is likely to grow in the future years as demand for higher bandwidth grows.

Market Restraints

• High Initial Cost of Active Optical Cable

The active optical cable market's growth is now limited by the large initial investment required. Embedded solutions, such as tiny form sizes, ambient light sensors, and optical transceivers, are extremely useful for transmitting data across optical cables while reducing interrupts. As a result, the rising price of these solutions drives AOC installation prices. Optical cables have a higher price tag than copper wires. This is due to the high reflectivity of their material and the use of SDH, CPRI, ONT, and transceivers. Active optical cables are not commonly accepted due to the hefty initial investment.

Market Opportunities

• Advancements in Fiber Optic Technology

Sophisticated semiconductors are being used to improve Fibre optic communications. To reduce error and create a secure network, a range of methods such as polymer optic fiber, laser neural network nodes, high altitude platforms, and intelligent optical transmission networks are employed. With the introduction of wireless systems such as 3G, 4G, and 5G, active optical cables can now deliver quicker and more cost-effective communication.

Furthermore, firms use acquisition and collaboration tactics to bring breakthrough fiber optic technologies, such as optical transmitter/receiver technology, optical amplification technology, and laser technology, to market. The active optical cable industry is likely to benefit greatly from advancements in fiber optics technology in the future years.

Regional Analysis

Significant Growth in North America

The global active optical cable market share is segmented into four regions: North America, Europe, Asia-Pacific, and Latin America Middle East & Africa (LAMEA). In 2020,

North America accounted for the largest share of the active optical cable market. The North American market is expected to generate a value of USD 6,432 million by 2030, with a CAGR of 26%. 

The United States, Canada, and Mexico make up North America. Because of the growing penetration of numerous multimedia and audio/video devices, the United States has the largest adoption of AOC. Moreover, advancements in display technology are projected to drive the AOC industry forward.

In recent years, the use of laptops and display systems like display screens, LED screens, and others, and the utilization of AOC cables to give output, has surged in North America. Breakthroughs in audiovisual solutions for usage in cutting-edge screen technology such as 8K, 4K, and others are driving the North American AOC market forward. As per a study conducted by eShopWorld, a firm located in Ireland, over 84 percent of consumers use desktop computers to purchase online in North America.

The United Kingdom, France, Germany, Russia, and the rest of Europe make up Europe. The development of interactive multimedia in the European region, as well as an increase in the consumption of durable goods, both contribute considerably to the market's growth. The data center, high-performance computing, personal computer, digital signage, and consumer electronics sectors are all expected to see growing adoption of AOCs in Europe.

In the following years, the Asia-Pacific market is expected to grow at a healthy rate. The Asia-Pacific active optical cable market is estimated to reach a value of USD 4,573 million by 2030, at a CAGR of 29% over the projected period. China, Japan, India, Australia, and the rest of Asia-Pacific are all examined. The Asia-Pacific region is expected to develop at the quickest rate, owing to rising connectivity demands and increased use of 3G/4G/5G services in economies like China and Japan. Due to the increased use of 4G/5G services and the need for improved connection, demand from nations such as China and Japan is on the rise. Market competition has given rise to new product design and creative technologies as a result of a variety of vendors. Service providers are now experimenting with new technologies in order to improve their offers and achieve a larger market share.

The Latin American, Middle Eastern, and African (LAMEA) market is investigated. In LAMEA, the adoption of modern technologies in numerous industries is relatively gradual. The active optical cable sector is concentrated in Latin America and the Middle East. The active optical cable market is predicted to rise due to increased demand for advanced technologies in nations like Dubai, Oman, Abu Dhabi, and Jordan. Furthermore, key market players are establishing manufacturing and marketing networks in LAMEA, which is projected to have a substantial impact on market growth.

Segmental Analysis

The global active optical cable market share is classified into technology, connector type, and application.

The active optical cable market is divided into five categories based on technology: InfiniBand, DisplayPort, Ethernet, USB, HDMI, and others. The InfiniBand segment is predicted to produce USD 5,999 million by 2030, outpacing other active optical cable technology categories. During the forecast period, it is expected to increase at a CAGR of 24%.

InfiniBand is a data transfer interface that supports peripheral devices such as servers, network switches, and hubs at high speeds and with minimal latency. InfiniBands are bidirectional serial buses that send and receive data at the same time. InfiniBand protocols are frequently used in AOCs. The InfiniBand interface has evolved over the last five years, moving from classic formats such as 10G QSFP+ to 14G FDR QSEP+ fiber optic cables, resulting in greater data transmission rates.

DisplayPort

The Video Electronics Standards Association (VESA) created a digital display interface called Display Port. The interface's primary purpose is to link a video source, like a laptop or television, to a display device, like a monitor or monitor. Both audio and video can be transmitted simultaneously using Display Port. Additionally, daisy chaining, which enables the connection of numerous display devices, is supported. Unlike conventional VGA or DVI cables, DisplayPort cables are thinner and more flexible.

The market is divided into QSFP, CXP, CDFP, CFP, SFP, and other connector types. At a CAGR of 27%, the QSFP segment is expected to be valued at USD 8,232 million by 2030.

QSFP cables are mostly utilized in data centres and HPC operations for high-density signal transmission. Previous QSFP AOCs targeted the 10-Gbps market; however, the present QSFP AOC industry is focused on 40-Gbps. As a result, an explosion of digital data transmission bandwidth is likely to repeat prospects for QSFP AOCs.

CDFP

The newest form factor, CDPF, can transmit large amounts of data quickly and efficiently. Its cutting-edge technology and interchangeable products for electrical and mechanical use meet the industry's needs. The market for active optical cable is where it is expanding at the fastest rate.

The active optical cable market is divided into five categories based on application: data center, high-performance computing, personal computing, digital signage, consumer electronics, and others. 

The active optical cable market is divided into five categories based on application: data centre, high-performance computing, personal computing, digital signage, consumer electronics, and others. The data centre category contributed the most to the market, with a forecasted value of USD 9,433 million by 2030, representing a CAGR of 27 percent over the projected period. One of the main determinants for the market is a rise in the number of data centre deployments around the world. In data centres, protocols like InfiniBand and Ethernet have exploded in popularity. However, substantial space, energy, and cooling restrictions continue to plague the data centre sector. High-performing AOCs are expected to help them meet these difficulties and improve their performance even more.

Impact of covid-19

Coronavirus is a severe menace that has spread around the world. As a consequence of the worldwide closure, which has disrupted the entire supply chain of electronic systems, production has halted. The 19 outbreak, as the epicenter of the virus epidemic, has caused a delay in meeting end-user demands. Wuhan, China, is the world's largest electronic component manufacturer. On January 30, 2020, the global epidemic of this disease was labeled a Public Health Emergency of International Concern. On February 11, 2020, the World Health Organization (WHO) designated the new Coronavirus disease 2019 novel coronavirus (2019-nCoV) and the disease 2019 Coronavirus disease (COVID-19) caused by Coronavirus SARS-Cov-2.

The ongoing COVID-19 epidemic has had a significant impact on the worldwide economy. The global active optical cable market for consumer devices and data centers is projected to be hampered by a sudden drop in infrastructure building projects and deployment projects.

The global economy has experienced a surge in demand for cloud/datacenter solutions and cloud infrastructure to support a dispersed workforce. The market benefits from the growing company's use of 5G networking as a result of increased online presence, which has been declared a national priority.

However, a slowdown in OEM production and a drop in demand for mobile phones and other consumer electronics dragged the market for actuators and valves down significantly. Supply chain disruptions caused by critical elements and material constraints have had a significant impact on global supply chains. In addition, capital budget cuts and delays in planned projects in a range of end-use industries impacted the global economy.

COVID-19 has spurred the semiconductor sector to mobilize quickly and make short-term actions with long-term implications.

Major companies in the active optical cable market are also projected to make modest R&D cuts, allowing them to maintain a diverse and developing product range. Furthermore, rather than establishing the bare minimum budget required to keep R&D running, businesses will attempt to fund development. Once the economy starts to recover, demand for new and innovative products is projected to increase. Companies are eager to invest in next-generation things that use emerging innovations rather than simply improving products using current state-of-the-art technology because this will help them establish their goodwill as customer demand grows.

Recent Developments

• In May 2022, TE Connectivity pushes for sustainability goals by 2030.
• In November 2022, Molex will demonstrate Single Pair Ethernet products at an event for Smart Production Solutions.
• In October 2022, Molex Introduced PCIe Cable Connection System for Open Compute Project Servers.
• In September 2022, First-to-Market Hybrid Optical-Electrical Interconnects for Co-Packaged Optics Are Launched by Molex.