Current And Future Optical Interconnect Market Size, Key Players, Analysis and Forecast

optical interconnect market


Optical interconnects use light signals to transmit data from one part of an integrated circuit to another. The requirement of enhanced performance multiprocessors leads to the demand for high-speed optical interconnects. Traditional copper-based electric interconnects are being replaced with optical interconnects as the performance of electric interconnects degrades after 1 Gbps data rate and causes signal latency, crosstalk, and frequency-dependent attenuation. The adoption of optical interconnects has increased over the years as they offer high-speed data transmissions, have low power consumption, and cause low signal attenuation.


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The cable assemblies product segment held the largest size of the optical interconnect market in 2019. The growth of this segment can be attributed to the increased deployment of fiber optics in datacenters and telecommunication applications across the world. These cable assemblies offer high data rates and low attenuation required by high bandwidth connectivity applications.


Based on interconnect level, the board-to-board and rack-level optical interconnect segment held the largest share of the optical interconnect market in 2019. The dominance of this segment can be attributed to the increased demand for optical interconnects for data communication in datacenters, as well as in high-performance computing and cloud computing applications.  


Based on application, the data communication segment held a larger share of the optical interconnect market than the telecommunication segment from 2020 to 2025. The growth of this segment can be attributed to the ongoing adoption of cloud storage and increasing technological developments taking place in the field of machine learning, artificial intelligence, and deep learning. This, in turn, increases data traffic across networks, thereby leading to significant demand for high data rate transceivers used for efficient data communication.


North America accounted for the largest share of the optical interconnect market in 2019. The growth of the market in North America can be attributed to the presence of some leading datacenter companies such as Microsoft, Google, Amazon, Facebook, and Apple in the US. These companies have a large number of hyperscale datacenters installed across the region, thereby contributing significantly to the growth of the optical interconnect market in North America. 


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