The report pointed out the main reason for this growth is that large cloud service operators began to use expensive high-speed 400G, 800G modules, and increased investment in 5G networks. The CAGR of the data communication market is about 20%. From the core/backbone network sink to the inter-rack interconnection, expensive and higher-speed optical modules will be used. The growth of the telecom optical module market will be driven by the deployment of DCI optical transmission solutions and 5G optical transceivers in Asia. In addition, the total revenue affected by the epidemic in 2020 is expected to increase moderately. In fact, the epidemic affected the growth of the global telecommunications market and sales of optical transiver modules. The Chinese government vigorously promotes the deployment of 5G and cloud data centers, resulting in strong demand for optical modules by data center operators.

According to Yole’s report, the evolution of multiple technologies has enabled the transmission speed of long-distance and metro networks to reach 400G or even higher. The current trend to migrate to 400G speeds stems from the need for cloud operators to interconnect data centers.

Article source: YOLE Developpement