The optical interconnect market size, in terms of value,
is expected to grow from USD 3.66 billion in 2015 to USD 13.03 billion by 2022, at a CAGR of 18.13 percent between 2016 and 2022. In the past few years, the data center architecture has put a significant load on power consumption, which needs to be overcome. Optical interconnects provide the data center operators with opportunity to lower the power loss caused due to the data center networks since optical transmission has much lower energy loss compared to the traditional copper-based interconnects. Also, in recent times, there has been a data avalanche, caused by growing usage of video streaming, big data, and cloud computing, creating need for servers to store very high amount of data and also very high-speed data transmission within servers. The growing need for lower consumption, high-speed data transmission, and efficient data storage is expected to increase the adoption of optical interconnects.

Optical transceivers accounted for the largest market share in the product category in 2015, states Markets and Markets. The growing demand for 100G data rate optical devices is the major reason behind the growth of optical transceivers. Optical transceiver is now an integral part of optical interconnect systems.

The market for the chip-level interconnects is also expected to gain momentum and is expected to grow at the highest rate. The growing popularity of parallel computing, combined with the need to have extremely fast and efficient chip-to-chip, chip-to-board, and on-chip interconnection due to the massive flood of data is pushing the need for higher adoption of chip-level interconnects.

North America is expected to hold the largest market share and dominate the optical interconnect market between 2016 and 2020, while the market in the APAC region is expected to grow at the highest rate. The growing population, rapid increase in the purchasing power parity (PPP), and rapid penetration of Internet and cloud computing are the reasons for the high growth rate in the world for this market.


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