The global passive optical components market is projected to be valued at USD 148.0 billion by 2032. It reached a valuation of USD 45.5 billion in 2022. A CAGR of 12.5% is expected to be registered by the global market from 2022 to 2032.
According to their structural differences, passive optical network can be divided into two categories, namely, Ethernet passive optical network (EPON) and gigabit passive optical network (GPON). Residential and commercial subscribers can access high-speed voice, video, and data services through gigabit passive optical network terminal devices.
In a computer network, last-mile long-reach connections and durability can limit the number of active switching devices that are used. On top of household broadband and IPTV, 3G & 4G mobile backhaul, enterprise services, time division multiplexing (TDM), voice & internet connectivity, phone services, and transportation services are all offered by Ethernet passive optical network.
The market is rapidly expanding as a result of key factors such as demand for mobile network scalability, strong IP traffic growth, and high return on investment. Developments in gigabit passive optical network security operations center innovations, low cost of ownership, and rising fiber to the home requirement would also contribute to the flourishing demand. The passive optical components market is rising, but it is being constrained by limited number of network device connections and challenges in managing passive optical network failure.
Rapid shift toward high-capacity optical networks and rising demand for large & wide bandwidths would further offer lucrative potential for expansion of the market for passive optical components. As optical power splitters, optical communications, and optical fiber networks are increasingly used in passive networks, the passive optical component industry is elevating significantly on a global scale.
As these passive optical components are so dependable, the fiber's quality is preserved. These parts are also less expensive. However, the main issue limiting growth in the passive optical component industry is high operational and installation costs.
| Attributes | Key Insights |
|---|---|
| Passive Optical Components Market Estimated Size (2022E) | USD 45.5 billion |
| Projected Market Valuation (2032F) | USD 148.0 billion |
| Value-based CAGR (2022 to 2032) | 12.5% |
| USA Value-based CAGR (2022 to 2032) | 11.3% |
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Future Market Insights, in its new report, mentioned that the global market for passive optical components exhibited a CAGR of 15.5% in the historical period from 2017 to 2021. It is anticipated to surge at a CAGR of 12.5% in the projected period from 2022 to 2032.
Governments are also implementing programs such as smart city initiatives with fiber-rich networks to facilitate the efficient flow of internet of things equipment. Utilities, including communication, water, surveillance, energy, wastewater management, and sewage can all be powered by technology thanks to fiber optic networks.
By 2050, the United Nation forecasts that more than 68% of the world's population will reside in urban areas. It will further encourage the development of additional smart city initiatives around the world. Owing to the aforementioned factors, sales of passive optical components are expected to skyrocket in the next ten years.
Rising Internet Penetration to Fuel Passive Fiber Splitter Sales
Passive optical components are the basic components of an optical network system. These components are widely used in fiber to the home networks in which video signals are generated with optical signals. These components are used in applications such as synchronous optical network (SONET), interoffice, hybrid fiber coaxial (HFC), loop feeder, fiber in the loop (FITL), and synchronous digital hierarchy (SDH).
Increasing penetration of telecom and internet services is likely to trigger the passive optical components demand worldwide. Need of high bandwidth by individuals for usage of internet would also create a rising demand of such components.
Ethernet passive optical network (EPON) equipment would also propel demand for data intensive applications such as voice over internet protocol, video on demand, and video conferencing. As per the Internet and Mobile Association of India-Kantar International Consortium of Universities for the Study of Biodiversity and the Environment (iCUBE) 2020, in 2020, there were 622 million active internet users in India. Till 2025, the number is expected to surge to be 900 million, up by 45%.
In passive optical network, there is a growing need to increase the speed, as well as efficiency of networks. Efforts are made to increase the existing gigabit Ethernet passive optical network from 2.5 Gbit/s and 1.25 Gbit/s to XGS-PON’s 10Gbit/s symmetric speeds. Rapid growth in consumer IP traffic is expected to stimulate expansion of components. For instance, global data volumes of consumer internet protocols (IP) in 2019 were 166 Exabyte per month and it expanded to become 211 Exabyte in 2020.
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Despite the fact that passive optical components’ inherent configuration has numerous benefits, there are a few drawbacks as well. Disadvantages are not, however, large enough to dissuade one from selecting passive optical components as the ideal arrangement.
Information dissemination from the optical line terminal to various optical network termination points is one of the first drawbacks to be taken into account. A divisor reduces network efficiency since it sends information from the optical line terminal to every optical network termination linked to the same phase or dissemination tree.
Passive optical network architecture is also vulnerable to external sabotage in terms of security. The architecture of data transmission itself causes this issue. All communication is muted by the injection of steady light at a specific wavelength, and service generally declines.
Need for High-speed Broadband Services in the USA to Push Passive Optical Receiver Sales
The USA passive optical components market is anticipated to reach a valuation of USD 42.9 billion by 2032. From 2022 to 2032, the market is likely to exhibit a CAGR of 11.3%, says Future Market Insights.
In February 2022, USA-based Calix Incorporation, a passive optical components and passive optical network manufacturer, for instance, announced that Lit Fiber has selected Intelligent Access EDGE.
It is powered by a network innovation platform in order to build 10G XGS-PON. The network is expected to deliver high-speed broadband services to over 500,000 houses by 2025. Such novel initiatives by renowned companies in the USA are likely to propel sales.
Government Investments to Install Broadband in the United Kingdom to Spur Passive Optical Networks Demand
The United Kingdom passive optical components market is expected to surge at a CAGR of 11.7% from 2022 to 2032. It is likely to reach a valuation of USD 7.4 billion by 2032 and create an incremental opportunity of USD 5.0 billion in the forecast period.
In August 2020, government of the United Kingdom announced that it has planned to fund USD 1.2 billion of public investment for public gigabit broadband for people in the country. Through this initiative, half a million premises have received connections to broadband since 2018. Almost 26% of houses and business have access to gigabit service in the United Kingdom.
Installation of Passive Optical Devices in China to Surge amid Need for Lowering Risk of Electric Sparks
China passive optical components market is expected to be worth USD 13.2 billion by 2032. It is set to create an absolute dollar opportunity of USD 9.5 billion in the estimated time frame. Passive optical components industry in China has surged at a CAGR of 17.1% from 2017 to 2021. It is expected to escalate at a CAGR of 13.5% from the year 2022 to 2032.
In April 2022, Huawei Technologies Company Ltd, a China-based technology company announced that it is offering passive optical networks (PON) technological solutions for coal mines. In the aggregation level, passive optical components are used to minimize the hazard of electrical sparks that is produced because of network devices. It would also help in improving production efficiency, as well as initiate safe production and improve working environments.
Need for Fiber to the Home in Japan to Boost Demand for Variable Fiber Optic Attenuators
Japan passive optical components market is likely to surge at a CAGR of 11.9% from 2022 to 2032. It is set to reach a valuation of USD 11.1 billion by 2032. From 2017 to 2021, the country exhibited a CAGR of 14.7%, says Future Market Insights.
In June 2022, the government of Japan announced its plans to cover 99.9% households by fiber to the home before March 2028. As per the Prime Minister’s plan, key cities and regional places are expected to have access to fiber to the home. Around 58% of households in Japan currently have access to fiber optic networks.
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Need for High-capacity Optical Communications to Drive Demand for Wavelength Division Multiplexing
Wavelength division multiplexing/windows display driver model of passive optical components in semiconductor manufacturing is projected to witness rapid growth. The segment is anticipated to surge at a CAGR of 12.4% in the forecast period from 15.4% CAGR witnessed throughout the historical period.
By varying wavelengths of laser beams, the wavelength division multiplexer (WDM) technology in fiber-optic communications multiplexes multiple optical carrier signals over a single optical fiber channel. It also makes the fiber cable's communication possible in both directions.
These days, network operators must accommodate growing bandwidth needs due to a huge increase in terms of internet usage across all industries. Network providers use wavelength division multiplexing, the essential building block for high-capacity optical communications networks, to meet rising demand and produce high capacity.
A few key players in the passive optical components market are AT&T Inc., Huawei Technologies Comp. Ltd, ZTE Corp., Ericsson Inc., Calix Inc., Motorola Solutions Inc., Broadcom Corporation Inc., Tellabs Inc., Alcatel-Lucent S.A., and Adtran Inc. among others.
These firms have carried out a wide range of important business initiatives, including growth of regional and client bases and introduction of new products. They are also engaging in the formation of collaborative relationships and joint projects for extension of product lines across international markets.
Few of the recent developments in the passive optical components industry are:
| Attribute | Details |
|---|---|
| Estimated Market Size (2022) | USD 45.5 billion |
| Projected Market Valuation (2032) | USD 148.0 billion |
| Value-based CAGR (2022 to 2032) | 12.5% |
| Forecast Period | 2022 to 2032 |
| Historical Data Available for | 2017 to 2021 |
| Market Analysis | Value (USD billion) |
| Key Regions Covered | North America; Latin America; Europe; East Asia; South Asia; Middle East & Africa |
| Key Countries Covered | USA, Canada, Brazil, Mexico, Germany, United Kingdom, France, Italy, Spain, Nordic, Russia, Poland, China, India, Thailand, Indonesia, Australia and New Zealand, Japan, Gulf Cooperation Council Countries, North Africa, South Africa, Others |
| Key Segments Covered | Component, Application, Region |
| Key Companies Profiled | ZTE Corp; Motorola Solutions Inc.; Huawei Technologies Comp. Ltd; Tellabs Inc.; Adtran Inc.; Alcatel-Lucent S.A.; Calix Inc.; Broadcom Corporation Inc.; Ericsson Inc.; AT&T Inc. |
| Report Coverage | Market Forecast, Company Share Analysis, Competitive Landscape, Market Dynamics and Challenges, Strategic Growth Initiatives |
Rapid shift toward high-capacity optical networks and rising demand for large & wide bandwidths.
The market exhibited a CAGR of 15.5% from 2017 to 2021.
Rising internet penetration to gain popularity in the forecast period.
Information dissemination from the optical line terminal to various optical network termination.
Government investments to install broadband in the United Kingdom to boost market revenue.
1. Executive Summary 2. Market Overview 3. Market Background 4. Global Market Analysis 2017 to 2021 and Forecast, 2022 to 2032 5. Global Market Analysis 2017 to 2021 and Forecast 2022 to 2032, By Component 5.1. Optical Cables 5.2. Optical Power Splitters 5.3. Optical Couplers 5.4. Optical Encoders 5.5. Optical Connectors 5.6. Patchcords and Pigtails 5.7. Optical Amplifiers 5.8. Fixed and Variable Optical Attenuators 5.9. Optical Transceivers 5.10. Optical Circulators 5.11. Optical Filters 5.12. Wavelength Division Multiplexing/ Windows Display Driver Model 5.13. Others 6. Global Market Analysis 2017 to 2021 and Forecast 2022 to 2032, By Application 6.1. Interoffice 6.2. Loop Feeder 6.3. Fiber in the Loop (FITL) 6.4. Hybrid Fiber-Coaxial (HFC) 6.5. Synchronous Optical Network 6.6. Synchronous Digital Hierarchy 7. Global Market Analysis 2017 to 2021 and Forecast 2022 to 2032, By Region 7.1. North America 7.2. Latin America 7.3. Europe 7.4. Asia Pacific 7.5. Middle East and Africa 8. North America Market Analysis 2017 to 2021 and Forecast 2022 to 2032, By Country 9. Latin America Market Analysis 2017 to 2021 and Forecast 2022 to 2032, By Country 10. Europe Market Analysis 2017 to 2021 and Forecast 2022 to 2032, By Country 11. Asia Pacific Market Analysis 2017 to 2021 and Forecast 2022 to 2032, By Country 12. Middle East and Africa Market Analysis 2017 to 2021 and Forecast 2022 to 2032, By Country 13. Key Countries Market Analysis 14. Market Structure Analysis 15. Competition Analysis 15.1. ZTE Corp. 15.2. Motorola Solutions Inc. 15.3. Huawei Technologies Comp. Ltd 15.4. Tellabs Inc. 15.5. Adtran Inc. 15.6. Alcatel-Lucent S.A. 15.7. Calix Inc. 15.8. Broadcom Corporation Inc. 15.9. Ericsson Inc. 15.10. AT&T Inc 16. Assumptions & Acronyms Used 17. Research Methodology
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Passive Optical Components Market
