Northbrook, IL 60062 -- (SBWire) -- 08/04/2022 --The global optical transceiver market size is estimated to grow from USD 5.7 billion in 2020 to USD 9.2 billion by 2025, at a CAGR of 10.0%. Increasing adoption of smart devices & rising data traffic and growing demands of cloud computing applications are the key factors driving the growth of the optical transceiver industry.

The emerging focus on the 5G network, increasing demand for high data transfer capabilities, and expansion of telecom infrastructure in developing economies are likely to provide growth opportunities to the optical transceiver market players during the forecast period. Increasing demand for high data transmission capabilities is an important opportunity in the market. Optical transceivers operate at different speeds for different applications, with the growing importance of mega data centers and cloud computing, organizations are demanding more data transmission speed.

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With the increasing penetration of the internet, the demand for high data transmission capabilities is rising at a faster pace. Being an important part of optical network equipment, the need for high-speed optical transceivers is also increasing rapidly. The next generation of tech powering data centers is planning to shift their optical communication to 400G technology.

Besides being the fastest in the market, the 400G has more optical lanes, which allow more amount of data to be processed at a single time. But with the advent of 4K video streaming, virtual reality games, 5G technology, artificial intelligence, and many more, 400G will gain significant importance amongst mega data centers in the foreseeable future. Tech giants such as Amazon, Facebook, Google, and Microsoft have already shifted to 100G technology, and they are expected to push their optical computing performance to the next level in the future, which would create opportunities for high-speed optical transceivers.

Optical transceiver market for data centers is expected to grow at highest CAGR due to factors such as transitions towards cloud storage and increasing technological developments including machine learning, artificial intelligence, and deep learning which in turn increases data traffic across networks which create demand for high data rate transceivers for efficient data communication. The development of hyperscale data centers is also driving the growth of high data rate optical transceivers, such as 100G, 200G, and 400G for channeling huge packets of information in a short span.

Moreover, leading cloud service providers such as Google, Amazon, and Microsoft are implementing high data rate transceivers in their data centers. Recent trends such as driverless vehicles, wireless communication, smart gaming, and entertainment devices, among others, are expected to increase data traffic across networks, which would drive the demand for high-speed optical transceivers to a great extent.

The optical transceiver market in APAC is expected to grow at the highest CAGR during 2019–2025. This growth can be attributed to the increasing penetration of 4G technology, along with the evolution of 5G technology in the region. Factors such as increasing internet penetration, technological advancements such as 4G and 5G connection, increase in the number of smartphones and connected devices by users eventually leading to an increase in data traffic in data centers and provide an opportunity for high data rate optical transceivers across the APAC region.

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Moreover, the expansion of hyper-scale data centers across the region, boosting the growth of the market. Additionally, three major internet companies in China—Baidu, Alibaba, and Tencent (BAT), are expanding their data centers across the Asian territory. Hence, the increasing expansion of data centers and advanced communication technologies are expected to drive the optical transceiver market in this region.