Data demands are surging, expected to more than double from 74 zettabytes in 2021 to 181 zettabytes by 2025. Today’s optical transceivers will not be able to keep up with this demand due to their current limitations related to compatibility issues with other connectors, high energy demands, signal loss and the use of copper cables for data transfer.
However, the role of optical transceivers is set to expand significantly in the next few years, driven by the growth of 5G and the imperative to save energy in data centers. Emerging optical transceiver solutions will address these limits and expand market opportunities. The global optical transceiver market is on track for substantial growth, expected to increase from 8.2 billion USD in 2022 to a significant 15.97 billion USD by 2027. This growth is based on a CAGR of 14.2%.
What is an optical transceiver?
An optical transceiver is a device used in communication networks to send and receive data. However, instead of using electrical signals over wires like traditional networking equipment, it uses light to transmit data over optical fiber cables.
Think of it as a tiny box acting as a translator and a messenger. On one side, it takes in electrical signals (the language of computers and networking equipment) and converts them into light signals that flash at incredibly high speeds. These light signals are then sent to another optical transceiver through optical fiber cables (thin glass or plastic). The other transceiver receives the light signals, translates them back into electrical signals, and sends them to another computer or network device. This process allows data to travel long distances at high speeds with minimal loss, making optical transceivers crucial for the internet, telecommunications, and large data centers.
Which sectors can leverage novel optical transceivers?
Optical transceivers will find applications within various sectors, enhancing connectivity and functionality.
Early adopters will gain a strategic edge, securing a substantial market share. Investing in developing cutting-edge optical transceiver use cases can yield returns within 5 years, even with moderate funding, enabling companies to fast-track novel use cases in about 8 months.
Example state-of-the-art approaches:
Optical transceivers are gradually achieving energy efficiency, high data rates, and increased signal quality. Some novel approaches include:
- Pulse Amplitude Modulation: PAM4 (Pulse Amplitude Modulation) transceivers employ an advanced modulation technique for higher data rates and improved signal quality, widely applied in high-speed data networks, including data centers and cloud computing.
- DSP & Coherent Transmission: DSP and coherent transmission tech are used to achieve target data rates and power efficiency goals.
- VCSELs: VCSELs, or Vertical-Cavity Surface-Emitting Lasers, emit light vertically, making them energy-efficient, cost-effective, and suitable for high data rates in optical transceivers.
- Optical Packaging: Optical packaging assembles and safeguards optical components, enabling them to function as a system.
The full report dives into the market potential vs roadblocks of these technologies plus others.
Included in this report:
- Optical transceivers market overview
- A forecast of the market direction
- Industry analysis and impact
- Technology insights and latest developments
- Emerging technologies with a 2030 roadmap
- Key insights from three subject matter experts
