Fiber Optic Components Market Size, Share, Opportunities, And Trends By Type (Cables, Amplifiers, Active Optical Cables, Splitters, Connectors, Transceivers, Others), By Application (Distributed Sensing, Communications, Analytical And Medical Equipment, Lighting), And By Geography - Forecasts From 2023 To 2028

Fiber optic components are devices used in the construction and maintenance of 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 used to convert electrical signals into light signals and vice versa and are majorly employed to connect fiber optic networks to other types of networks such as Ethernet. The growing demand for different types of fiber optic components driven by their increasing consumption across different fields is stimulating 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 high demand for internet access of high speed 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. In addition, Flexera, a US-based software company projected that the ratio of companies adopting a hybrid cloud strategy increased to 58% in 2022, increasing by 51% from 2021. 

• Increasing consumption of 5G services

The rising rates of 5G consumption across the world are massively increasing the demand for various fiber optic components to facilitate 5G services to a growing number of customers. For instance, a statistic produced by Ookla indicates that roughly 43.8% of South Koreans and 49.2% of Americans with access to 5G devices have shifted to consuming 5G networks. In addition, the China Academy of Information and Communications Technology revealed that China is anticipated to invest US$174.2 billion in the deployment of the 5G network by 2025.

The development of wireless network technology and the presence of regulatory issues could restrain the growth of the market. 

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 further restrain the consumption of fiber optic components. 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.

Key Developments

• In 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.
• In August 2022, the product lines of a company developing optic laser, IPG Photonics that facilitated telecom transmission using different fiber optic parts such as ASIC capabilities, differentiated transceiver products, coherent components, and optical transceivers were acquired by Lumentum Holdings Inc., a US-based telecom company. 
• In June 2022, a dense wavelength-division multiplexing product manufactured using the QSFP-DD-400G-DCO-ZR/ZR+ cohesive transceiver technology that introduces 400G ZR/ZR+ coherent transceivers on switch was introduced by FiberMall, a Hong-Kong-based company providing optical fiber solutions to facilitate DCI DWDM interaction using optical level communication.

North America holds a significant portion of the fiber optic components market and is expected to grow over the forecast period.

The increasing consumption of 5G technology and the development in the data center capacity is driving the growth of the fiber optic components in the region. For instance, one of the three major 5G telecom providers in the US, Verizon, received the first 5G base station in the USA from Ericsson in 2020. The base station was produced at Ericsson's newly developed 5G production facility and smart factory in Texas which is stimulating the 5G transformation in the country. In addition, the Canadian Radio-television and Telecommunications Commission revealed that more than 87% of the population in Canada has access to 5G services by 2021. A report generated by Ookla, a company providing connectivity solutions revealed that the average download speed on 5G networks exceeded the average speed of wireless connections on mobiles by 60.2% in September 2022. Further, the Canadian Wireless Telecommunications Association estimated that Canada will be investing an additional amount of US$26 billion between 2020 and 2026 to deploy 5G networks.

In addition, the growth of cloud computing and the demand for enhanced internet speed have led to an increase in the number of data centers in the region, and since, data centers require fiber optic networks to connect servers and storage systems, the demand for fiber optic components is increasing. For instance, the North American data center trends generated by CBRE Group Inc, a real estate company claims that more than 100 data center projects were announced or were currently in the development stage in the US in 2021. Enormous and major operators like Facebook, Apple, Google, and Microsoft, along with colocation service providers were in charge of more than 90% of these activities.

Key Market Segments:

• 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
    • United Kingdom
    • Spain
    • Others
  • Middle East and Africa
    • Saudi Arabia
    • UAE
    • Israel
    • Others
  • Asia Pacific
    • China
    • Japan
    • India
    • South Korea
    • Taiwan
    • Others