The size of the optical network hardware market is expected to grow at 13 percent CAGR to $24.99 billion during 2107-2021, according to Technavio.
The dominating technology in the optical network hardware market is wave division multiplexing (WDM), generating over 81 percent of the overall revenue. WDM technology’s dominance is driven by China’s investments in broadband infrastructure, with a focus on 100G fiber-optic internet connections.
ALSO READ: Technavio report on optical network hardware market
Increase in mobile data traffic, demand for data centers and the development of 5G network are driving the demand for optical network hardware products.
“Optical fiber infrastructure is being deployed across the globe to meet the demand for high-speed broadband,” says Sunil Kumar Singh, lead analysts at Technavio for embedded system research at Technavio.
Optical fiber networks connect to cell towers where radio-frequency photons are converted to infrared photons to ensure efficient and effective transfer of data to all-fiber networks. The demand for these fiber networks and the hardware associated with it will accelerate over the forecast period, thereby driving market growth.
The adoption of data centers is creating demand for optical networking, a core part of storage area networking and business connectivity solutions. The increase in demand for bandwidth, low power, and wide reach data centers is enhancing the adoption of new optical modules.
The data centers require optical fiber modules to connect servers and switches to accommodate the growing data traffic and adoption of cloud solutions. The need for the latest fiber channel speed stops to ensure efficient data management in data centers will drive the demand for optical network hardware.
5G is designed to meet the growing demand for optimized wireless network technology, supporting high-speed data transmission in cellular networks. The 5G technology will increase internet speed by up to 40 times.
The report said 5G’s network infrastructure requires low latency, power consumption, and cost, with higher capacity in terms of data transfer. Optical network hardware is a perfect fit for the 5G requirements, creating demand for optical fiber networks.
