According to Yole's report, the annual revenue generated by the global optical transceiver market will increase by US$11 billion in 2022 (annual increase of 12.5%), and it is expected that the global optical transceiver market revenue will decline slightly in 2023, mainly due to large-scale capital expenditures ( Hyperscale CAPEX) growth slowed down. By 2028, the global optical transceiver market revenue will reach US$22.2 billion, with a compound annual growth rate (CAGR) of 12% from 2022 to 2028, mainly driven by the high demand for 800G high data rate modules from large cloud service providers push down.
The slight decline in revenue in 2023 comes down to a slower rate of growth in Hyperscale CAPEX. In 2023, the overall data center capital expenditure of hyperscalers will drop significantly. On the other hand, telecom capital expenditure (Telecom CAPEX) will decline by 3% per year in the next three years. However, year-over-year growth in wired and wireless telecom equipment may only be 1% in 2023. One of the reasons for the slow growth in data center hyperscale capex is the closure of the Metaverse and its negative impact. Actions taken by Meta and other affected industries will lead to a slowdown in optical transceiver deployment in 2023.
At the same time, in the "Mega Datacenter Optics Report" released by LightCounting (LC) in July 2023, it is estimated that in the next five years, the total sales of optical transceivers for AI cluster applications will reach 17.6 billion US dollars, compared with all other industries in the same period. Applying Ethernet transceiver revenue of $28.5 billion is a very large number indeed. In 2022, optical transceivers deployed in AI clusters already account for 25% of the total market.