Optical Communication and Networking Equipment Market Expected to Reach $26.83 Billion By 2027

According to a recent report published by Allied Market Research, titled, “Optical Communication and Networking Equipment Market By Component, Technology, and Industry Vertical: Opportunity Analysis and Industry Forecast, 2020-2027,” the global optical communication and networking equipment market size was valued at $15.72 billion in 2019, and is projected to reach $26.83 billion by 2027, registering a CAGR of 7.2%. Optical networks have become the backbone of telecommunication industry as it enables portable computer devices to exchange data at rapid pace. The equipment for optical communication includes optical amplifiers, transceivers, transmission fibers, tunable filters, termination devices, add-drop multiplexers, and dispersion compensation equipment.

Surge in data traffic owing to the increased internet usage, increasing number of data centers, and rise in adoption of cloud based as well as virtualization services fuel the growth of the optical communication and networking equipment market. Also, increase in demand for advanced network equipment due to COVID-19 pandemic is projected to drive the growth of the market during forecast period. However, requirement of huge initial investments is anticipated to restrain the market growth. 

On the contrary, the acceleration in deployment of VOIP, LTE, and 5G networks is expected to provide lucrative opportunities for the optical communication and networking equipment market growth. In addition, rise in adoption of AI and IoT anticipated to be opportunistic for growth of the market during the forecast period.

Global optical communication and networking equipment market has been significantly impacted by the COVID-19 outbreak. The production facilities of the electronics and semiconductors have been halted, owing to the slowdown and unavailability of the workforce across the globe.  The market growth has experienced a dip in 2020, due to the disruption in global supply chains cause by the pandemic.  However, the market is expected to witness a recovery in its growth rate in the coming years, owing to the growing focus of organizations to fulfill upsurge in demand for telecommunication equipment driven by rapid acceleration in 5G deployment across the globe. 

In addition, pandemic has boosted the number of fiber optic broadband lines around the globe due to more data traffic as well as new broadband demands with people staying at home. For instance, according to IDATE, a Media company and the FTTH Council Europe, a non-profit organization, high speed fiber will pass 202 million houses in the European Union and Britain by 2026, up from 88.1 million in 2019. This is mainly driven by the acceleration in demand for faster internet services due to COVID-19 pandemic.

Region wise, the market size is analyzed across North America, Europe, Asia-Pacific, and LAMEA. Asia-Pacific was the highest revenue generator in 2019, accounting for approx. $8.00 Billion, and is estimated to garner $14,085.60 million by 2027, growing at a CAGR of 6.70%. 

The global optical communication and networking equipment market is segmented on the basis of component, technology, industry vertical, and region. On the basis of component, the market is divided into optical fiber, transceiver, switch, and others. By technology, the market is classified into SONET, WDM, and Fiber Channel. On the basis of industry vertical, it is divided into IT & telecom, BFSI, military & defense, oil & gas and medical healthcare. Region wise, the optical communication and networking equipment market analysis is across North America, Europe, Asia-Pacific, and LAMEA. 

Key Findings of the Study

• In 2019, the transceiver segment accounted for maximum revenue, and is projected to grow at a notable CAGR of 7.6% during the forecast period. 
• The medical & healthcare segment is expected to witness the highest growth rate during the forecast period.
• By region, Asia-Pacific is expected to dominate the market, garnering a major optical communication and networking equipment market share.

The company profiles of optical communication and networking equipment market players included in this report are Arista Networks, Inc., Cisco Systems, Inc., Ericsson, Fujitsu Optical Components Limited, Huawei Technologies Co., Ltd., Juniper Networks, Inc., Mitsubishi Electric, NEC Corporation, Nokia Corporation, and ZTE Corporation. The global optical communication and networking equipment industry key market players adopt various strategies such as product launch, product development, collaboration, partnership, and agreements to influence the optical communication and networking equipment market growth.