Optical Spectrum Analyzer Market

Market Overview

The global optical spectrum analyzer market size was valued at USD 264.31 million in 2022. It is estimated to reach USD 517.45 million by 2031, growing at a CAGR of 7.75% during the forecast period (2023–2031). Factors like the growth of 5G technology and demand from various end-user industries drive the market growth.

An optical spectrum analyzer (OSA) is precision equipment that measures and displays the power distribution of an optical source over a given wavelength span. In simpler terms, optical spectrum analyzers (OSA) can separate the wavelengths of a lightwave signal. This indicates that the spectral profile of the signal is visible over a specific wavelength range. A spectrum trace from an optical analyzer shows power on the vertical scale and wavelength on the horizontal scale. Testing lasers, LED light sources for spectral purity and power distribution, and other optical devices for transmission quality are applications for optical spectrum analyzers.

Optical spectrum analyzers are the perfect tools for analyzing laser modes, performing extremely fine spectroscopic measurements, testing communications equipment and systems, and other tasks. The telecommunications business, where dense wavelength division multiplexing (DWDM) is utilized to offer high data bandwidth using fiber optics, is one of the primary applications of OSAs. Since most telecommunication equipment production procedures require a wavelength characterization test to validate the product for market entry, OSAs are in high demand in this industry. 

Highlights

• Benchtop dominates the type segment
• Telecommunication dominates the end-user industry segment
• North America is the highest shareholder in the global market

Market Dynamics

Global Optical Spectrum Analyzer Market Drivers

Growth of 5G (Millimeter Wave) Technology

The advancement in technologies over the past decade has enabled the widespread usage of millimeter wave frequency spectrum (30 GHz–300 GHz) to address the challenges of lower frequency and high-speed c. The evolution of millimeter technology is expected to accommodate a substantial increase in data demands from mobile-first users, connected homes, cloud gaming systems, self-driving vehicles, AR/VR devices, IoT sensors, and other cloud-connected devices. 

With the increasing demand for millimeter components, manufacturers are now developing technologies and affordable components with new semiconductor materials, such as gallium arsenide (GaAs), gallium nitride (GaN), silicon germanium (SiGe), and indium phosphide (InP). 5G networks are anticipated to be driven by the augmented wireless capacity and speeds offered by high-frequency millimeter waves. In addition, companies and universities have set high expectations for high-speed communications (5G) through their tests, using advanced-testing equipment, such as OSA's. With advancements in millimeter waves and other 5G technologies, new wireless networks are expected to be built to meet the high-speed communication requirements, aiding the market to grow further.

Technology Proliferation in Emerging Economies

In emerging countries of Africa, Asia, and Latin America, there is a growing need for cost-effective solutions with a high dynamic range and innovative features to increase the quality of connections. The need for inspection is observed with the growing demand for higher-quality connections. In addition, with increased infrastructure growth and complex networks, the market for OSA is expected to boost.

To support the higher frequencies of 4G/LTE and future telecom standards, such as 5G, more fiber cables are required to increase the coverage, along with the antennas. Similarly, the increasing need for big data solutions and cloud-based storage in developing countries also increases the demand for higher-quality connections. As a result, companies that provide big data and cloud storage solutions can develop their clientele by selling a lot of fiber optic test equipment, which will further the market's expansion.

Global Optical Spectrum Analyzer Market Restraint

Replacement of Optical Spectrum Analyzer Products with Advanced Products

Spectrum analyzers need a sweeping signal source, a superheterodyne mixer, and filters to sweep throughout the measuring range and measure the power in one frequency band at a time. They can assess signals with a dynamic range of tens of hertz to hundreds of gigahertz. The advancement of alternative products, such as Fourier analyzers, hinders the growth of optical spectrum analyzers.

Fourier analyzers, often called FFT analyzers, do complex (vector) analyses of the samples. These analyzers digitize a waveform with 12-bit, 14-bit, or 16-bit ADCs and store up to several million samples. The data is then translated into the frequency domain using an FFT technique. An FFT analyzer with a vector analyzer front end has a spectrum analyzer front end. The spectrum analyzer front end allows the instrument to operate in the gigahertz range. Such factors restrict market growth.

Global Optical Spectrum Analyzer Market Opportunities

Demand from various End-User Industries

Emerging fields and sectors of optics-related applications have spawned numerous industries and organizations needing developed and improvised optical spectral instruments for research and development. These organizations comprise consumer electronics, healthcare, telecommunications, and medical research. Furthermore, OSAs are of great importance to telecom equipment manufacturers. As most of the telecom equipment fabrication procedure includes a wavelength characterization test to qualify a product for market entry, the demand for OSAs from this sector is considerably high, creating opportunities for the market to grow.

In addition, visible light is used in various fields, such as medical care, material processing, biotechnology, and home electronics applications. Research and development of highly-proficient high-performance products using optical technologies, such as a semiconductor laser developed for data communication, has become more widespread in recent years. The growing demand has developed for high-performance optical spectrum analyzers to evaluate and analyze their optical spectrum. Moreover, Dense Wavelength Division Multiplexing (DWDM) is growing exponentially, and the channel density in a single fiber also provides significant opportunities for optical spectrum analyzers.

Regional Analysis

Based on region, the global optical spectrum analyzer market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America is the most significant global optical spectrum analyzer market shareholder and is anticipated to exhibit a CAGR of 7.37% during the forecast period. North America is one of the largest optical spectrum analyzers markets globally. The country has a high-demand form for almost all end users. The rapid adoption of Industry 4.0 initiatives encouraging automation and a connected manufacturing environment is one of the primary drivers creating the region's demand for optical spectrum analyzers. In addition, North America has emerged as a highly lucrative market. The demand for optical spectrum analyzers in the US market is also anticipated to increase due to several significant manufacturers supported by the developed economy. It will gain from increasing automotive production and extensive electronic integration in the automotive industry. Due to the advancement of 5G in the region, all the major service providers are moving toward launching new devices that support the technology, creating a potential demand for OSAs in the market.

Asia-Pacific is estimated to exhibit a CAGR of 8.36% over the forecast period. The demand for optical spectrum analyzers (OSA) is generally high in the telecom and manufacturing industry across Asia-Pacific, mostly In China, Japan, India, Singapore, South Korea, and others. The rising demand for connected environments across the Asia-Pacific region, especially in the manufacturing sector, started driving the need for reliable and faster communication networks. The introduction of 5G and cloud communications services will likely massively increase data traffic volumes and data generation.

In addition, the growth in sales of 5G smartphones in markets such as India and other developing countries in Asia-Pacific, where 5G services are yet to be available to consumers, is driven by a push from chipmakers prioritizing 5G chips. All significant telcos have already conducted 5G trials across India. For Instance, In April 2022, Airtel was in advanced talks with traditional and OpenRAN vendors to finalize 5G contracts. The telecom operator works with Tata Consultancy Services (TCS) and Mavenir to deploy the OpenRAN-based 5G network. Expanding the 5G network will also allow the Optical Spectrum Analyzer (OSA) market to grow in the coming future.

In Europe, the growth of the IT and telecommunication industry will soon fuel the demand for optical spectrum analyzers. Moreover, advances in medical technology and the need for medical imaging technology across Europe after COVID-19 facilitate the use of optical spectrum analysts in medical devices. It makes it possible to use the Fast Fourier Transform to detect wavelength emissions from LED sources, lasers, and laser diodes (FFT). Optical spectrum analysts are in demand due to the rising geriatric population worldwide, the development of medical technology, and the surge in demand for cancer treatment equipment. In addition, the sizeable telecommunications sector in Europe is expected to drive the optical spectrum analyzer market's expansion in the following years.

The COVID-19 pandemic impacted several industries globally by reinforcing digital trends and leading users to leave analog solutions behind. This dynamic also challenged the paradigms of the telecommunications market in Latin America. The growing deployment of 5G technology also transforms the telecom industry and boosts the Latin American market. This change occurs across Latin America; all countries are switching toward fiber optic cables.
The optical spectrum analyzer (OSA) market is gaining from the rising IT and telecommunication industry demand across the Middle East and Africa. Also, Industry 4.0 has arrived globally and will spark unprecedented innovation in the Middle East and Africa region. As technology evolves, a global trend of integrating electronics and electrical systems in various industries. However, other factors, such as rising demand for portable spectrum analyzers, technological advancements in optical spectrum analyzers, the growing trend of wireless technology, and global advances in frequency and bandwidth, will propel the market. 

Segmental Analysis

The global optical spectrum analyzer market is segmented by type and end-user industry.

Based on type, the global optical spectrum analyzer market is bifurcated into portable, handheld, and benchtop OSAs.

The benchtop segment dominates the global market and is projected to exhibit a CAGR of 7.42% over the forecast period. The benchtop OSA is beneficial when the spectrum analyzer may be connected to AC power, typically in a lab setting, factory, or production area. Historically, benchtop spectrum analyzers have outperformed portable or handheld models in performance and features. Furthermore, these types of OSA are costlier than the other two optical spectrum analyzers. With the significant growth in the Internet of Things (IoT) and cloud computing services, the rise in access to mobile broadband, and video broadcasting and conferencing, demand for data capacity will bolster significantly over the next few years. Various companies in the market are launching new optical spectrum analyzers in the benchtop form factor. For instance, in August 2021, Yokogawa Test & Measurement Corporation announced the launch of a new optical spectrum analyzer (OSA) designed to offer the extremely high precision demanded by researchers developing the next generation of optical communication components.

Handheld spectrum analyzers are useful for applications where the spectrum analyzer needs to be small and light. Handheld analyzers usually provide a limited capability compared to larger systems. Handheld OSA is used when the required precision or scope of measurements is fairly low. A field analyst may use a handheld spectrum analyzer to study wireless communication interference. Moreover, handheld spectrum analyzers' weight and space limitations limit their functionality considerably. Handheld OSAs are ideal for various field applications, such as DWDM and CWDM network commissioning and troubleshooting. In addition, various companies in the market offer handheld optical spectrum analyzers to cater to users' needs. For instance, Optiplex Corporation offers a handheld and smart optical spectrum analyzer (OSA). The OSA has an Android tablet for data processing, analysis, display, and communications. Moreover, it is based on tunable-filter technology that offers high performance, fast scanning speed, and compactness.

Based on the end-user industry, the global optical spectrum analyzer market is segmented into telecommunication, healthcare, consumer electronics, and others.

The telecommunication segment owns the highest market share and is estimated to exhibit a CAGR of 7.32% during the forecast period. Telecom is the most prominent end-user for optical spectrum analyzers, owing to a wide range of applications in the industry. Mostly OSA finds its applications in R&D activities and many field operations. In the case of the telecommunication industry, the demand for OSA is seen from R&D and field applications. In the telecom industry, spectrum analyzers are essential for determining the required signal spectrum and strength to ensure a reliable network. In addition, optical spectrum analyzers are used to continuously monitor the required output signals, which helps telecom providers dynamically modulate their signals' intensity. As several wavelengths are used in a DWDM system, it is essential to identify the parameters for each wavelength, exact wavelength, dynamic range, power level, or optical signal over noise ratio (OSNR). Herein, the optical spectrum analyzer (OSA) provides these parameters and a trace of power as a function of wavelength.

The manufacturing and R&D of equipment for biomedical, material processing, consumer products, short-wavelength lasers, passive devices, and LED are driving new features in OSA. Fiber optics are widely used in healthcare and medical applications, such as laboratory medicine (lab-on-a-chip) and patient-centered medicine (endoscopy, ENT, and dentistry). Fiber optic sensors are increasingly adopted in diverse applications, including enhancing miniature microscopy. Optical fiber can reach any part of the human body due to its extreme bendability. This, in turn, is estimated to boost the utilization of optical fiber, boosting installation and maintenance activity. Endoscopy is gaining high traction, which will likely boost the utilization of optical spectrum analyzers in R&D and manufacturing

Recent Developments

• March 2023- Keysight Technologies, Inc. announced a real-time spectrum analysis (RTSA) solution enabling up to 2 GHz RTSA bandwidth to be utilized with the Keysight N9042B UXA Signal Analyzer — this software-based RTSA solution monitors satellite signals and interference, enabling satellite network operators to provide the highest quality of service (QoS) to end users.
• August 2022- Yokogawa announced the release of two new optical spectrum analyzers (OSAs): the AQ6375E and AQ6376E. The launch was intended to satisfy market demand for an instrument capable of measuring a broad spectrum of wavelengths to meet new requirements in the manufacturing and development of optical products.