Active Optical Cable market worth $3,480.7 million by 2023 examined in new market research report

Active optical cable market report, published by Allied Market Research, was valued at $481.3 million in 2015 and forecasts that the global market is expected to garner $3,480.7 million by 2022, registering a CAGR of 32.7% during the period 2016-2022.

An active optical cable (AOC) is a cabling technology that uses optical fiber between the connectors to improve the cable’s performance. There is a rise in demand for AOC as it serves as an alternative to copper cables, due to its various advantages such as small bend radius for easy installment, low power consumption, and light weight.

Applications of these cables have expanded, from high-performance computers to networking and storage with the support of many protocols. In addition, AOCs rely on different protocols, such as InfiniBand, USB, and Ethernet, for data transmission.

The global active optical cable marketis primarily driven by a growth in the demand for active optical cables in data centers and an increase in the demand of high bandwidth networks. Cloud based applications; audio and video services, online gaming, and CATV require high-speed data services, which are facilitated by the use of AOCs.

However, the high initial investment and the threat of replacement from copper cables and wireless broadband limits the growth of this market. The advancement in the fiber optics technology provides numerous opportunities in this market.

The active optical cable market is concentrated; the top five leading players including Finisar Corporation, Avago technologies, Oclaro, Inc., Viavi Solutions Inc. and Sumitomo Electric Industries, Ltd.

occupy around 65% of the overall AOC market. The AOC market is currently dominated by Finisar Corporation.

The company has focused on the datacom sector; and a large part of its sales came from this sector in 2015.  However, other players such as Avago technologies and Oclaro, Inc.

are expected to give a tough competition to Finisar in the future.

The active optical cable market is segmented on the basis of protocol, connector, application, and geography. The protocol segment is further categorized into InfiniBand, Ethernet, HDMI, DisplayPort, USB, and others (Thunderbolt and PCI Express).

Currently, the InfiniBand segment holds a significant share in the overall market, due to its increased usage in commercial applications such as data centers and high-performance computing. The connector segment is divided into QSFP, CXP, CDFP, CFP, SFP, and others (CX4 and mixed connectors).

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Among the connector segment, QSFP and CXP accounted for the maximum share in 2015. The application segment includes data center, high-performance computing, personal computer, digital signage, consumer electronics, and others (transport, telecom cable, medical, airport, aircrafts, and ships).

In the year 2015, data centers contributed the highest revenue share, accounting for around 50% of the overall market revenue.  Based on geography, the market is segmented into North America, Europe, Asia-Pacific, and LAMEA.

In addition, the report covers country-wise cross-sectional analysis of the protocol, connector, and application segments.

Active optical cable protocol includes InfiniBand, Ethernet, HDMI, DisplayPort, USB, and others. Amongst these, the InfiniBand segment holds a significant share in the global active optical cable market, due to its increased usage in commercial applications, such as data centers and high performance computing.

Analyst Review:

The impending need of faster data communication in commercial applications, such as data centers and HPCs, and substantial increase in the demand for high bandwidth have increased the adoption of active optical cables (AOCs). This increase is facilitated by increasing adoption of cloud applications, video services, and online gaming.

These cables provide higher bandwidth, enhanced reliability, and small bend radius for easy installations.

Numerous governments in emerging countries, such as China and Brazil, heavily invest in the replacement of copper cables with AOCs across all public communication networks. Several initiatives are taken by governments to improve network infrastructure in their countries, thereby increasing the connectivity within the region and subsequently enhancing the business opportunities.

For instance, in 2016, according to Economic Affairs Division (EAD), China invested $11.24 million for establishment of cross-border optic fiber cable for high-speed international connection.

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AOCs are primarily used in data centers and high-performance computing. However, with the increasing requirements for efficient transfer of high-speed data, these cables find higher application in personal computer, digital signage, and consumer electronics.

Among all the application segments, digital signage is expected to be the most lucrative investment area. Among the connector types, QSFP and CXP accounted for the maximum share in 2015.

Considering the regional trends of the AOC, North America is projected to hold largest market size. The market in Asia-Pacific is in its growth phase and is expected to be the fastest growing region, owing to the increasing number of data centers and developing infrastructure.

On the other hand, LAMEA is in the introductory phase in terms of adoption of these cables.

Leading players, such as Finisar Corporation, Avago Technologies, and Oclaro, Inc., are expected to explore newer technologies and applications to meet the growing demands of customers. Collaborations and acquisitions are expected to enable them to enhance their product portfolios and expand into different geographies.

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