The Worth of The Optical Transceiver Market in 2028 is Projected to be $22.3 billion

Yole Developpement reports that the optical transceiver market is predicted to experience a 12% Compound Annual Growth Rate (CAGR) between 2022 and 2028. During this period, the market is expected to double in value, reaching $22.3 billion by 2028. The adoption of generative AI is anticipated to fuel this growth, specifically in the development of data center infrastructure and the use of optical transceivers to support it. China's role in this market is also gaining prominence due to its advancements in the field of AI.

The rising demand for AI-driven technologies, such as UHD video, augmented reality/virtual reality (AR/VR) applications, and cloud services, particularly in areas like social networking, business meetings, video streaming in UHD, e-commerce, and gaming, is a major driving force behind the need for data centers. However, the high server computer density required for AI applications creates significant heat, leading to energy efficiency and sustainability challenges.

According to Martin Vallo of Yole, revenue generated by the optical transceiver market experienced a 19.3% increase from $9.8 billion in 2021 to $11 billion in 2022. This significant growth can be attributed to the strong demand for 800G high-data-rate modules by large cloud service operators and communications service providers (CSPs).