Optical Switches Market - Growth, Trends and Forecast (2019 - 2024)

The Market is Segmented by Type (All-Optical Switch, Electro-optical Switch), Application (Optical Switching, Fiber Restoration and Optic Component Testing, Network Monitoring), Technology, and Geography.

Market Snapshot

Picture5
Study Period:

2018-2024

Base Year:

2018

Fastest Growing Market:

Asia Pacific

Largest Market:

Asia Pacific

Key Players:

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Market Overview

The optical switches market is expected to register a CAGR of over 13.41% during the forecast period 2019 - 2024. The growing proliferation of cloud across all aspects of businesses in a diverse range of end-user industries is creating a robust demand for data center operations, as companies are increasingly investing to gain prominence in a highly contested and populated market space. Further, as major cloud content providers build out ever-larger data center facilities, the bandwidth limitations of conventional data center architectures become more apparent, throttling aggregate performance and efficiency.

  • The demand for cloud services, virtualization, and edge computing is augmenting the growth of the data center market. This has led to an overflowing influx of traffic within the data centers, thus pushing operated to find improved means to interconnect rising numbers of servers and move larger amounts of data between them. Server interconnection scalability within the data center is becoming a bottleneck, and inefficient data flow scaling constrains data center growth. Operational inefficiencies caused due to product breakages are reducing server utilization and wasting critical space, powering, and cooling resources.
  • Traditional data center, such as Optical-to-electrical-to-optical (OEO) switches and Ethernet routers have limited scalability and cannot keep up with growing intra-data center traffic bandwidth demands. Further, the logistics of deploying and managing miles of optical fiber required is not considered feasible.
  • While there are many ongoing as well as planned optical fibre network investments for various end-user applications, it is critical to consider the budget for a new fibre cable project. While most managers focus on the unit price of the materials involved, there is a greater need to select materials to achieve the best TCO for the customer.            
  • The deployment of the fibre cable network deems itself as an expensive task. Further, maintenance of the network equipment and cables is also extremely necessary to ensure perfect system delivery. Fans and blowers are used to ensure an efficient cooling mechanism, which is vital to the fiber cable’s performance.
  • This necessitates a rigorous maintenance program. It also adds to the overall costs that come with the fiber optic technology. Due to these factors, telecom operators may hesitate to make such huge investments unless completely sure on the ROI, this may hinder the market growth.

Scope of the Report

Optical switches used in fiber optic transmission systems contribute to the development of the optical network. The main function of optical switching is to enable routing of optical data signals without the need for conversion to electrical signals and, consequently, is independent of data rate and data protocol. The transfer of the switching function from electronics to optics will offer a reduction in the network equipment, increase in the switching speed, and a decrease in the operating power.

By Type
All Optical Switch (OOO)
Electro Optical Switch (OEO)
By Application
Optical Switching
Fiber Restoration and Optic Component Testing
Optical Add - Drop Multiplexing
Network Monitoring
Optical Cross - Connects (OXC)
Others (External Modulators)
By Technology
Mechanical Optical Switch
Micro Electronics Mechanical Switch (MEMS)
Liquid Crystal Optical Switch
Bubble Switch
Thermal Optical Switch
Semiconductor Optical Amplifiers Switch
Other Technologies
Geography
North America
US
Canada
Europe
Germany
UK
France
Russia
Italy
Rest of Europe
Asia-Pacific
China
Japan
India
South Korea
Australia
Rest of Asia-Pacific
Latin America
Brazil
Argentina
Mexico
Rest of Latin America
Middle East &Africa
UAE
Saudi Arabia
Israel
Rest of Middle East & Africa

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Key Market Trends

Optical Switching is Expected to Register a Significant Growth

The segment comprises of various applications of all-optical switches. Technological advancements in the all-optical switch, coupled Software Defined Network (SDN) paradigms, create compelling solutions to bring the fiber layer under software control. In addition to this, the adoption of all-optical switching in data centers facilitates both traffic provisioning and protection switching between the external network and the peering arbitrator.Moreover, in all-optical switching, any optical connection can be remotely monitored and tested and can be configured to switch automatically based on reduction, or loss, of the optical signal.

Furthermore, the incorporation of all-optical switching to C-RAN architectures allows the sharing of centralized monitoring and test equipment across multiple optical fiber front haul links interconnecting RRHs and BBUs.In 2017, China Telecom built a WDM ASON backbone network at 21 nodes throughout Jiangsu, Shanghai, Zhejiang, Hubei, Anhui, and Jiangxi. Through this project, the company deployed the first all-optical network 2.0 backbone network in the country.

The project witnessed the transformation from electric switching nodes to all-optical switching nodes. In addition, 21 ROADMs were deployed to create intelligent optical nodes, which will eventually become the optical cross-connect (OXC). Thus, potential such investments in other countries are expected to drive the demand for all-optical switches.

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North America is Expected to Hold Major Share

The global roll out of 5G commercial services is expected to commence during 2019-2020. To support the accelerated build out of 5G in the United States, Ericsson predicts that 5G subscriptions are expected to reach the 150 million user mark, accounting for 48% of all mobile subscriptions in North America by the end of 2023.

Unlocking the full potential of 5G in the United States depends on the extension of fiber deep into the network. Despite the demand and potential economic benefits of fiber deployment, the United States currently lacks the fiber density in access networks to make the bandwidth advancements that are necessary to improve the pace of innovation and economic growth.

At the same time, an analysis based on the Deloitte Consulting LLP estimates that, the United States requires between USD 130 and USD 150 billion over the next 5-7 years to adequately support broadband competition, rural coverage, and wireless densification.

The aforementioned factors are expected to support and drive the demand for optical fiber-based broadband services, which in return aid the market growth significantly.Ericsson increased investment in 5G, AI, and automation in the United States, seeing the strategic opportunity in the market.

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Competitive Landscape

The optical switches market is highly competitive and consists of several major players. In terms of market share, few of the major players currently dominate the market. These major players with prominent share in the market are focusing on expanding their customer base across foreign countries. These companies are leveraging on strategic collaborative initiatives to increase their market share and increase their profitability.

The companies operating in the market are also acquiring start-ups working on Optical Switches technologies to strengthen their product capabilities. In June  2018, Hewlett Packard Enterprise and Deutsche Telekom AG implemented the world’s first proof-of-concept network data layer (NDL), which integrates various virtual network functions (VNFs) of different vendors, in a cloud infrastructure.

Major Players

  1. Keysight Technologies Inc.
  2. Hewlett Packard Enterprise Co
  3. Fujitsu Ltd
  4. ZTE Corporation
  5. Yokogawa Electric Corporation

* Complete list of players covered available in the table of contents below

Optical Switches Market

Download the market shares of key players in this industry.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Introduction to Market Drivers and Restraints

    3. 4.3 Market Drivers

      1. 4.3.1 High Cost of Maintenance and Equipment for Deploying the Optical Network

      2. 4.3.2 Increasing Internet Penetration and Data Traffic of Mobile Devices

    4. 4.4 Market Restraints

      1. 4.4.1 Resistance in Variation of Existing Applications or Systems

      2. 4.4.2 Complexity Issues

    5. 4.5 Value Chain / Supply Chain Analysis

    6. 4.6 Industry Attractiveness Porters Five Force Analysis

      1. 4.6.1 Threat of New Entrants

      2. 4.6.2 Bargaining Power of Buyers/Consumers

      3. 4.6.3 Bargaining Power of Suppliers

      4. 4.6.4 Threat of Substitute Products

      5. 4.6.5 Intensity of Competitive Rivalry

    7. 4.7 Technology Snapshot

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Type

      1. 5.1.1 All Optical Switch (OOO)

      2. 5.1.2 Electro Optical Switch (OEO)

    2. 5.2 By Application

      1. 5.2.1 Optical Switching

      2. 5.2.2 Fiber Restoration and Optic Component Testing

      3. 5.2.3 Optical Add - Drop Multiplexing

      4. 5.2.4 Network Monitoring

      5. 5.2.5 Optical Cross - Connects (OXC)

      6. 5.2.6 Others (External Modulators)

    3. 5.3 By Technology

      1. 5.3.1 Mechanical Optical Switch

      2. 5.3.2 Micro Electronics Mechanical Switch (MEMS)

      3. 5.3.3 Liquid Crystal Optical Switch

      4. 5.3.4 Bubble Switch

      5. 5.3.5 Thermal Optical Switch

      6. 5.3.6 Semiconductor Optical Amplifiers Switch

      7. 5.3.7 Other Technologies

    4. 5.4 Geography

      1. 5.4.1 North America

        1. 5.4.1.1 US

        2. 5.4.1.2 Canada

      2. 5.4.2 Europe

        1. 5.4.2.1 Germany

        2. 5.4.2.2 UK

        3. 5.4.2.3 France

        4. 5.4.2.4 Russia

        5. 5.4.2.5 Italy

        6. 5.4.2.6 Rest of Europe

      3. 5.4.3 Asia-Pacific

        1. 5.4.3.1 China

        2. 5.4.3.2 Japan

        3. 5.4.3.3 India

        4. 5.4.3.4 South Korea

        5. 5.4.3.5 Australia

        6. 5.4.3.6 Rest of Asia-Pacific

      4. 5.4.4 Latin America

        1. 5.4.4.1 Brazil

        2. 5.4.4.2 Argentina

        3. 5.4.4.3 Mexico

        4. 5.4.4.4 Rest of Latin America

      5. 5.4.5 Middle East &Africa

        1. 5.4.5.1 UAE

        2. 5.4.5.2 Saudi Arabia

        3. 5.4.5.3 Israel

        4. 5.4.5.4 Rest of Middle East & Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Company Profiles

      1. 6.1.1 Keysight Technologies Inc.

      2. 6.1.2 Hewlett Packard Enterprise Co

      3. 6.1.3 Fujitsu Ltd

      4. 6.1.4 ZTE Corporation

      5. 6.1.5 Yokogawa Electric Corporation

      6. 6.1.6 Nokia Corporation

      7. 6.1.7 Cisco Systems Inc.

      8. 6.1.8 Huawei Technologies Co Ltd

      9. 6.1.9 Ciena Corporation

      10. 6.1.10 Infinera Corporation

      11. 6.1.11 ADVA Optical Networking SE

      12. 6.1.12 Coriant GmbH

      13. 6.1.13 Keysight Technologies Inc

      14. 6.1.14 Juniper Networks Inc

      15. 6.1.15 Ericsson Inc

    2. *List Not Exhaustive
  7. 7. INVESTMENT ANALYSIS

  8. 8. MARKET OPPORTUNITIES AND FUTURE TRENDS

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