The global optical transceiver market is expected to grow at a CAGR of above 10% during the period 2018-2022, according to a new market research study by Technavio.
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Technavio has published a new market research report on the global optical transceiver market 2018-2022 under their hardware and semiconductor library. (Photo: Business Wire)
The report categorizes the global optical transceiver market by end-user, including datacom, telecom, and enterprise. The report also determines the geographic breakdown of the market in terms of detailed analysis and impact, which includes key geographies such as APAC, the Americas, and EMEA.
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Market driver: migration from copper wires to optic fibers
The migration from the use of copper wires to optic fibers is a major driver for the growth of the optical transceiver market. To transmit data over long distances, a copper fiber uses electrical impulses. This leads to large attenuations, which, in turn, results in the distortion of data. Moreover, security issues arise with the usage of copper wires as they can be easily tapped. Optic fibers are inexpensive, lightweight, and non-flammable and they can carry higher bandwidths compared with copper wires.
According to a senior analyst at Technavio for embedded systems research, “Copper wire signal strength diminishes at high frequencies whereas optical fiber can carry higher frequency ranges and more than 1,000 times the bandwidth of copper wires. Copper wires without a proper insulation jacket have poor durability, but optic fibers are extremely durable. Optical fibers are not affected by radio frequency interference and can be used in harsh conditions.”
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Market trend: migration of OTNs toward WDM architecture
OTNs have started migrating from SONET technology toward wavelength-division multiplexing (WDM) architecture, more prominently to dense WDM (DWDM). The deployment of DWDM systems by carriers has been successful to a great extent. Currently, by carrying multiple wavelengths over a single optical fiber, they can tap an enormous capacity. This has allowed carriers to make significant reductions in the cost of deploying an overlay of multiple networks for each service offering or single-channel networks. Where the installation space is less, and installation of more cables is not possible, WDM becomes more important. Fault detection, performance monitoring, and isolation of the wavelength are some of the benefits of this system.
Market challenge: deployment issues of fiber optic infrastructure
One of the biggest growth opportunities for communication service providers is the multi-dwelling units (MDUs) category in the housing field. Based on the geography and earth stratum, a different mechanism has been designed for fiber deployment. One of the biggest challenges in the market is the deployment of fiber optics, especially in the existing apartments and condominiums.
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Some of the major contributors in the global optical transceiver market:
- Finisar
- Lumentum Operations
- Oclaro
The global optical transceiver market is concentrated. There are only a few prominent players in the market. However, players in the market are investing highly in R&D activities to gain a greater share of the market. The market is expected to have an increase in the number of competitors in the future. Through mergers and acquisitions and collaboration with local players, competitors are expected to increase their global footprint.
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