Fiber Optic Component Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Market Overview

The Fiber Optic Component Market is expected to grow at a CAGR of 10.7% over the forecast period 2021 to 2026. This market's growth is propelled by the increasing deployment of data centers, growing internet penetration and data traffic, rising demand for bandwidth and reliability, and developments in the fiber optic components ecosystem.

• With the growing requirement for IoT and more connected devices, data transmission has become essential. According to Forbes, the total installed base of the Internet of Things (IoT) connected devices is projected to amount to 75.44 billion worldwide by 2025, a fivefold increase in ten years. Consequently, the fiber optic component market is observing a significant opportunity for growth during the forecast period.
• Further, technological advancements in the telecom sector have increased the deployment of broadband network architectures. Fiber to the Home (FTTH) and Fiber to the Building (FTTB) are the few prominent broadband networking architectures that necessitate the large-scale deployment of fiber optic networks, hence fiber optic components, thus, driving the fiber optic component market growth.
• Among all the types in the fiber optic components, the market for the transceiver is expected to hold the largest share. Major factors driving the fiber optic components market for transceivers include the higher interconnect capability and high-speed data transmission. For instance, as per Cisco Systems, the average mobile connection speed stood at an estimated 17.7 Mbps worldwide in 2020 against 6.8 Mbps in 2016 and is expected to reach 20.4 Mbps in 2021 globally.
• Moreover, the introduction and adoption of new applications such as wearable devices, IoT, and cloud computing address the change in the needs of consumers. According to the Cisco Visual Networking Index, the number of connected wearable devices worldwide has more than doubled in three years, increasing from 325 million in 2016 to 722 million in 2019. The number of devices is forecast to reach more than one billion by 2022. Hence, the fiber optic component market has been witnessing a considerable opportunity for growth during the forecast period.
• The increasing internet penetration and data traffic are leading to the rapid growth of data centers and the need for high-speed transmission networks, thus fueling the Fiber Optic Component Market. For instance, Cisco Systems forecast that by 2021, there will be 7.2 million data centers in the world, which has generated an ever-greater amount of data and it is projected that by 2021, around 1,327 EB data would be stored in data centers – almost an 8-fold increase from 2015, thus boosting the demand for fibre optic components.
• Among various applications, the communications application accounted for the most significant share of the overall fiber optic components market. The growth of this market can be attributed to the mass utilization of digital technologies and applications in telecommunications, data centers, and enterprises.
• With all this development in the communications application, the demand for fiber optic components would also rise. However, difficulty in managing the failure of passive optical networks (PON) and less range of network devices connection are restraining the growth of this market.

Scope of the Report

The components that form the fiber optic networking system are called fiber optic components. Fiber optic components are becoming the core of the telecommunication industry, and advancements in cabling technology have resulted in the significant growth of fiber optic components. Typical fiber optic components include coupler/splitters, transceivers, WDM multiplexer, optical circulator, amplifier, filter, isolator, and various other functional modules.

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Key Market Trends

Fiber Optic Cables to Dominate the Market

• As the internet continues to expand at an exponential rate, so does the demand for increased bandwidth. The global demand for higher internet bandwidth is presenting lucrative opportunities for the fiber optic cable vendors, encouraging the market growth, as, according to Equinix, by 2020, the total global interconnection bandwidth is projected to increase from 1,144 terabits per second in 2016 to 4,991 terabits per second by 2020.
• According to ITU in 2019, the number of internet users worldwide was 4.13 billion, up from 3.92 billion in the previous year. A vast amount of information is conveyed across the internet each day, with information forms such as multimedia and video on the rise. The result is a need for a communication infrastructure such as fiber optic cables that can handle vast quantities of data and deliver this effectively on a global scale.
• The use of light within fiber optic cables offers several security benefits compared to a traditional copper cable. This is why they are increasingly favored in today’s world, as there is a greater focus than ever before on protecting sensitive data.
• As a survey by NortonLifeLock Inc. says that over 90% of global online users had at least one significant concern about data privacy, 47% of respondents were worried about their personal information, and an additional 40% of worldwide respondents stated discomfort about sensitive personal information being sold to third parties.
• Fiber optic cables are essential within a 5G network infrastructure. To achieve a real 5G revolution, fiber optic cables are essential. 5G is based on a small cell model that brings connectivity closer to the end-user. This short cell model requires a crucial fiber optic cable backbone to deliver a cohesive internet experience.
• According to GSMA, the number of 5G connections is projected to grow to 1.1 billion by 2025 globally, and as per the same source, 5G connections will account for around 50% of total mobile connections in developed Asia in 2025. Ericsson stats say that in 2020 the number of 5G mobile subscriptions is forecast to rise to around 18 million in North America. Recognizing all these growth and advancements in 5G connections and its network infrastructure, the market for fiber optic cables is expected to boost.
• As fiber optic technology has advanced, several use cases have been identified across various industries. The medical industry has traditionally utilized fiber optics for illumination, image transfer, and laser signal delivery. In the Aerospace sector, fiber optics are increasingly looked to as the solution for increasing commercial flights' connectivity.

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