Submarine Cables Market Size, Share & Trends Analysis Report By Application (Submarine power cables, Submarine communication cables), By Voltage (Medium Voltage, High Voltage, Extra-High Voltage), By End-User (Offshore Wind Generation, Inter-Country and Island Connection, Offshore Oil and Gas), By Component (Dry plant products, Wet plant products), By Offerings (Installation and Commissioning, Upgrade, Maintenance) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global submarine cables market was valued at USD 27.61 billion in 2023. It is estimated to reach USD 47.04 billion by 2032, growing at a CAGR of 6.1% during the forecast period (2024–2032). Over the course of the forecast period, with the surging digitization, there has been a surging demand for high-speed internet and efficient data transmission, which is estimated to drive the global submarine cables market. Furthermore, the emergence of undersea data centers has also created the demand for seamless data transmissions, which is estimated to create opportunities for the global submarine cables market growth.

Market Overview

Submarine cables are underwater cables used primarily for telecommunication and internet services. These cables are laid on the ocean floor, connecting continents and enabling high-speed data transmission across vast distances. The cables consist of multiple layers, including optical fibers that carry data as light signals, protective coatings, and reinforcing materials to withstand harsh underwater conditions.

Submarine cables play a crucial role in the global communication infrastructure, handling about 99% of international data traffic. They support various services such as internet browsing, phone calls, and streaming, ensuring seamless global connectivity. The installation of these cables involves specialized ships and sophisticated technology to navigate and lay cables across the seabed. Submarine cables are vital for the digital economy, supporting everything from financial transactions to social media interactions, and are constantly being upgraded to meet the growing demand for faster and more reliable communication networks.

Highlights

• Submarine power cables dominate the application segment.
• Dry plant products dominate the components segment.
• Installation and commissioning dominate the offering segment.
• Europe is the highest shareholder in the global market.

Market Dynamics

Global Submarine Cables Market Drivers:

Increasing Demand for High-Speed Internet and Data Transmission

The global submarine cables market is witnessing significant growth due to the escalating demand for high-speed internet and efficient data transmission. With the proliferation of data centers and the rising adoption of cloud-based services, the need for reliable and high-capacity communication infrastructure has surged. Submarine cables, known for their ability to transmit large volumes of data over long distances with minimal latency, have become a critical component of this infrastructure.

According to TeleGeography, over 1.2 million kilometers of submarine cables are in service globally, facilitating approximately 99% of international data traffic. Additionally, the advent of technologies such as 5G and the Internet of Things (IoT) further accentuates the demand for robust data transmission networks, driving the expansion of the submarine cables market.

Global Submarine Cables Market Restraint:

High Installation and Maintenance Costs

One of the primary restraints in the submarine cables market is the high installation and maintenance costs associated with these systems. Laying submarine cables involves extensive planning, significant capital investment, and complex engineering processes. The cost of installing submarine cables can range from $30,000 to $50,000 per kilometer, depending on factors such as water depth, cable type, and installation environment.

Furthermore, maintenance of submarine cables poses additional challenges due to their underwater location. Repairing a damaged cable requires specialized vessels, advanced technology, and skilled personnel, making it a costly and time-consuming process. For instance, repairing a single fault in a submarine cable can cost between $1 million and $3 million. These high costs can deter investments, particularly in developing regions where budget constraints are prevalent, thereby hindering the growth of the submarine cables market.

Global Submarine Cables Market Opportunities:

Rising Investments in Undersea Data Centers

The emergence of undersea data centers presents a lucrative opportunity for the submarine cables market. Undersea data centers, such as Microsoft's Project Natick, leverage the cooling efficiency of ocean water to reduce energy consumption and improve sustainability. These data centers require reliable and high-capacity submarine cable connections to facilitate seamless data transmission. The increasing focus on energy-efficient and sustainable data center solutions is expected to drive investments in undersea data centers, subsequently boosting the demand for submarine cables.

According to the International Data Corporation (IDC), the global data center market is projected to grow at a CAGR of 10.3% from 2021 to 2026, creating substantial opportunities for submarine cable manufacturers and service providers. Additionally, the need for enhanced connectivity and reduced latency for applications like artificial intelligence (AI) and edge computing further underscores the potential for growth in this segment.

Regional Analysis

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

Europe Dominates the Global Market

Europe holds a dominant position in the global submarine cables market and is projected to experience significant growth during the forecast period. This dominance is attributed to the region's robust focus on renewable energy integration, grid interconnection, and the development of offshore wind farms. According to the European Commission and the European Wind Energy Association, the European Union (EU) aims to achieve 60 gigawatts (GW) of offshore wind capacity by 2030 and 300 GW by 2050. This ambitious expansion will require substantial investments in submarine cable infrastructure to transmit electricity from offshore wind farms to mainland grids.

Furthermore, the EU's commitment to enhancing energy security and creating an integrated European energy market has spurred numerous inter-country submarine cable projects. Notable examples include the NordLink cable, a 623-kilometer subsea connection between Norway and Germany, completed in 2021 to facilitate renewable energy exchange. Another significant project is the Celtic Interconnector, a planned 575-kilometer submarine cable linking Ireland and France, which aims to bolster energy security and incorporate renewable energy sources. This is anticipated to increase the demand for submarine cables in the region. Moreover, leading European submarine cable manufacturers include Nexans, Prysmian Group, and NKT Cables, which are well-positioned to capitalize on the increasing demand. These developments underscore Europe's pivotal role in driving the global submarine cables market, leveraging its advanced infrastructure and strong policy support for renewable energy initiatives.

The Asia-Pacific region is emerging as a pivotal player in the global submarine cables market, driven by escalating demand for inter-country power interconnections, offshore wind farm development, and reliable internet connectivity. According to the International Energy Agency (IEA) and the Asia Wind Energy Association, the region is expected to account for over 60% of global electricity demand growth by 2040, necessitating extensive submarine cable infrastructure. Key countries such as China, India, and South Korea are significantly investing in submarine cable projects to meet rising energy demands and integrate renewable energy sources into their grids.

Notably, China aims to develop offshore wind farms with a combined capacity of 40 GW by 2030, requiring substantial submarine cable networks for power transmission. Furthermore, the region's burgeoning digital connectivity needs, driven by the proliferation of e-commerce, cloud computing, and streaming services, further fuel demand for high-speed internet submarine cable systems. According to TeleGeography, the Asia-Pacific region accounted for nearly 40% of global international internet bandwidth demand in 2021. Major market players such as Hengtong Optic-Electric, NEC Corporation, and Fujikura are leading the way in this sector, thereby driving the submarine cables market in the Asia-Pacific region.

Segmental Analysis

The global submarine cable market is bifurcated into application, voltage, end-user, component, and offerings.

Based on the application, the global submarine cable market is bifurcated into submarine power cables and submarine communication cables.

Submarine power cables dominate the application segment. The submarine power cables segment of the Global Submarine Cables Market is expanding due to increased offshore wind power generation and the need for efficient power transmission. Growing investments in offshore wind farms, such as Japan's floating wind farm with 140 turbines, highlight the rising demand for these cables. They are crucial for connecting renewable energy sources to mainland grids and ensuring reliable power supply to remote locations and oil rigs. The electrification of offshore oil and gas platforms further boosts demand. Governments worldwide are investing heavily in offshore projects to reduce carbon emissions and enhance energy security, driving significant growth in the submarine power cables market.

The global submarine cables market is segmented based on voltage: medium, high, and extra-high.

The high voltage segment has been dominating the global market over the forecast period. High-voltage cables rated above 33kV are crucial for efficient power transmission and distribution, particularly in the expanding offshore wind sector. Increased investments in offshore wind farms and rising demand for HVDC submarine cables drive the high-voltage cable market. These cables enhance power delivery by minimizing transmission losses and facilitating efficient electricity transfer from high-capacity sources to the mainland. The rapid growth of HVDC infrastructure, supported by initiatives such as DESERTEC and the North Seas Countries Offshore Grid, alongside organizations like CIGRE, is pivotal in advancing HVDC power networks and meeting future energy demands.

Based on end-users, the global submarine cable market is divided into offshore wind generation, inter-country and island connection, and offshore oil and gas.

The offshore wind power generation segment dominates the global submarine cable market, driven by the global shift toward renewable energy and increased investments in offshore wind farms. This segment's prominence stems from the need for efficient power transmission from offshore wind farms to onshore grids. Governments worldwide, such as Japan, with its plan to install 140 turbines in a floating wind farm 12 miles offshore, are investing heavily in offshore wind projects to reduce carbon emissions and diversify energy portfolios. These projects require extensive submarine power cable infrastructure to connect generated electricity to mainland grids, ensuring efficient, clean energy transmission to urban areas and fueling the growth of the offshore wind power generation segment in the submarine cable market.

Based on components, the global submarine cable market is divided into dry plant products and wet plant products.

Dry plant products currently dominate the component segment of the global submarine cable market. Dry plant products include terrestrial components required for managing and operating submarine cable systems. These components include onshore equipment, data centers, power feed equipment, and monitoring systems for the submarine cable infrastructure. Dry plant products are critical to the efficient operation and maintenance of submarine cable systems, as they provide the infrastructure required for data transmission and connectivity. The segment dominated the market because of its critical role in managing and controlling submarine cable networks, which allows for seamless data transmission across continents and oceans. Dry plant products, which serve as the foundation of submarine cable systems, make a significant contribution to the reliability, performance, and overall functionality of global communication networks, meeting the growing demand for high-speed and reliable data transmission in today's connected world.

Based on offerings, the global submarine cable market is divided into installation and commissioning, upgrade, and maintenance.

The installation and commissioning segment is the most significant contributor to the market. This is because of the high cost of installation equipment and technological procedures. Submarine cable boats, jointing and testing equipment, operation control software, and underwater installation equipment are all part of submarine cable deployment equipment. Beach burying equipment, a burial machine, underwater robot remotely operated vehicles, and an automatic control system comprise the underwater installation equipment for undersea optical cables. Over the projection period, the segment is likely to see attractive growth potential.

Recent Developments

• April 2024- Google has declared its intention to allocate $1 billion towards the development of new subsea cable networks, with the aim of enhancing internet access between the United States and Japan.
• January 2024- NEC Corporation India has finished the construction of the Kochi-Lakshadweep Islands Submarine Cable earlier than expected. This cable now links 11 islands and contributes to India's 'Digital India' initiative.