Fiber Optic Components Market - Forecasts from 2024 to 2029

The fiber optic components market is expected to grow at a CAGR of 7.97%, from US$25.347 billion in 2022 to US$43.365 billion in 2029.

Fiber optic components are devices used in constructing and maintaining fiber optic networks that transmit data using light signals over thin strands of glass or plastic fibers. The most used fiber optic components include cables, amplifiers, active optical cables, splitters, connectors, transceivers, adapters, and patch panels.

Transceivers are devices that convert electrical signals into light signals and vice versa. They mainly connect fiber optic networks to other networks, such as Ethernet. The growing demand for different types of fiber optic components driven by their increasing consumption across different fields stimulates the overall growth of the fiber optic components market.

In addition, the growing demand for high-speed internet is resulting in excessive consumption of fiber optic networks to facilitate faster and more reliable internet access, further leading to an increased demand for fiber optic components to build and expand these networks.

The rising consumption of cloud-based services, developments in 5G infrastructure, and increase in data center establishments are anticipated to significantly expand the fiber optic components market over the forecast period.

Market Drivers

• The growth in consumption of cloud computing services by companies-

The growing importance of cloud computing driven by globalization and digitalization of business operations is resulting in a huge demand for high-speed internet access, which is driving the demand for fiber optic components to build fiber optic networks to provide the necessary bandwidth and speed to support cloud computing, For instance, the World Economic Forum revealed that approximately more than 65% of the companies around the world are modifying their business models to accommodate cloud computing.

• Increasing consumption of 5G services-

The surging adoption of 5G services globally is driving a substantial increase in demand for diverse fiber optic components essential for delivering 5G capabilities to an expanding user base. Projections indicate that the implementation of 5G technology could contribute a significant boost of $450 billion to the Indian economy from 2023 to 2040. With estimates from the Global System for Mobile Communications (GSMA) suggesting nearly one billion smartphones installed in India by 2025, including 920 million unique mobile subscribers, including 88 million 5G connections, the investment prospects in this sector are highly promising. Furthermore, the China Academy of Information and Communications Technology has disclosed intentions for China to invest approximately US$174.2 billion in 5G network deployment by 2025.

Restraint-

• The development of wireless network technology and regulatory issues remain significant challenges.

The development of wireless networks such as 4G and 5G with the capability of providing high-speed internet access, like fiber optic networks, is limiting the demand for fiber optic networks in certain areas. Further initiatives by companies to advance wireless network technology to facilitate faster internet are expected to restrain the consumption of fiber optic components further.

For instance, in June 2022, NTT, Docomo, Inc., and Fujitsu declared their collaboration to develop wireless devices to facilitate the development of 6G infrastructure. In addition, the deployment of fiber optic networks can be hindered by regulatory issues such as zoning and permitting requirements which can slow down the growth of the fiber optic components market.

Fiber optic components market segmentation by application into distributed sensing, communications, analytical and medical equipment, and lighting

The market for fiber optic components can be segmented based on their application across distributed sensing, communications, analytical and medical equipment, and lighting. In distributed sensing, these components play a crucial role in measuring physical parameters like strain, temperature, pressure, and vibration across extensive distances.

In communications, fiber optic components are indispensable for enabling high-speed data transmission within telecommunications networks. Analytical and medical equipment benefit from the utilization of fiber optic components, finding applications in devices like microscopes, endoscopes, and various sensors.

Additionally, fiber optic components are also employed in diverse lighting applications such as architectural, automotive, and underwater lighting solutions.

North America holds a significant proportion of the fiber optic components market-

The surge in 5G technology adoption and the expansion of data center capacity are key drivers propelling the growth of fiber optic components in the region. According to a report by Ookla, a provider of connectivity solutions, 5G networks boasted an average download speed surpassing that of wireless mobile connections by 60.2% as of September 2022.

Additionally, the Canadian Wireless Telecommunications Association projects Canada's investment of an extra US$26 billion between 2020 and 2026 to deploy 5G networks. Notably, major industry players like EMCORE Corporation, Lumentum Operations LLC, Coherent Corp., and Broadcom are headquartered in the US.

Furthermore, the proliferation of cloud computing and the escalating demand for faster internet speeds have fueled the proliferation of data centers in the region. Given that data centers rely on fiber optic networks to interconnect servers and storage systems, the demand for fiber optic components is on the rise.

Market Developments

• July 2023- OFS and Heraeus Comvance announced today that Heraeus Comvance had acquired a portion of the OFS Fitel Denmark ApS plant in Brondby (near Copenhagen). Heraeus manufactured standard optical telecommunication fibers based on a European value chain and provided these fibers to the EMEA market. OFS continued to provide its customers outside of EMEA as well as its cable factories with a full range of fiber types from world-class draw towers in the US.
• December 2022- Lumenisity Limited, a company producing optic fiber component products such as hollow core optical fiber, was acquired by Microsoft Azure to meet the stringent performance and safety standards of Microsoft's Cloud Platform and Services customers while further streamlining the international cloud facilities.
• August 2022- The product lines of a company developing optic laser, IPG Photonics, that facilitated telecom transmission using different fiber optics parts such as ASIC capabilities, differentiated transceiver products, coherent components, and optical transceivers, were acquired by Lumentum Holdings Inc., a US-based telecom company.

Company Products-

• High-Speed Networking Fiber Optics by Broadcom- The company provides high-speed networking fiber optics, offering fiber optic components tailored for a range of industrial, automation, power generation/distribution, transportation, gaming, and medical applications. These fiber optic modules and components cater to diverse needs across various sectors, ensuring reliable connectivity and performance.
• Specialty optical fibers- Coherent Corp. provides specialty optical fibers, offering a wide selection from its extensive catalog of single-mode (SM), multimode (MM), and polarization-maintaining (PM) fibers. These fibers are designed for various uses including lasers and amplifiers, beam delivery, geophysical sensing, gyroscopes, and medical applications.
• TRUMPF VCSELs and photodiodes for optical communication- TRUMPF offers VCSELs and photodiodes tailored for optical communication purposes, providing both standard and customized solutions. Alongside their standard product range, TRUMPF specializes in developing customized solutions to meet specific customer requirements. Their VCSEL and photodiode offerings are known for surpassing industry standards and adhering to recognized benchmarks such as those established by IEEE.

Market Segmentation

By Type

• Cables
• Amplifiers
• Active Optical Cables
• Splitters
• Connectors
• Transceivers
• Others

By Application

• Distributed Sensing
• Communications
• Analytical and Medical Equipment
• Lighting

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• Germany
• France
• UK
• Spain
• Others
• Middle East and Africa
• Saudi Arabia
• UAE
• Israel
• Others
• Asia Pacific
• China
• Japan
• India
• South Korea
• Taiwan
• Others