PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1944402
PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1944402
Optical Transceiver Market size was valued at US$ 12,991.90 Million in 2024, expanding at a CAGR of 12.91% from 2025 to 2032.
The optical transceiver market comprises devices that send and receive data as light signals via optical fibre, enabling high-speed, long-distance communication across telecom networks, data centres, and enterprise infrastructure. Accelerating 5G rollouts and rising cloud data traffic are driving market growth, both of which require higher bandwidth low-latency connectivity. A key trend is the adoption of high-speed transceivers like 400G and 800G to support hyperscale data centers. However, high initial costs and complex integration act as barriers, particularly for smaller operators. Despite this, growing investments in smart cities, AI-powered applications, and edge computing offer promising opportunities for next-generation optical transceiver adoption.
Optical Transceiver Market- Market Dynamics
Rising 5G Network Deployment Driving Optical Transceiver Market Growth
The increasing deployment of 5G networks is anticipated to be a key driver of growth in the optical transceiver market. As the fifth generation of wireless technology, 5G delivers substantially higher data speeds, ultra-low latency, and enhanced network capacity compared with earlier generations. Optical transceivers play a vital role in 5G infrastructure, enabling high-speed, low-latency data transmission across core, metro, and access networks. According to the GSM Association (GSMA), global 5G connections reached around 1 billion in 2022 and are projected to double to nearly 2 billion by 2025. This rapid expansion of 5G connectivity is directly accelerating demand for advanced optical transceiver solutions worldwide.
The Global Optical Transceiver Market is segmented on the basis of Fiber Type, Wavelength, Form Factor, Connector, Application, Distance, Data Rate, and Region.
Less than 10 Gps accounts for the largest share of the market due to its cost-effectiveness. The demand for optical transceivers with speeds less than 10 Gps is increasing as organizations continue to use legacy network infrastructure and make cost-effective upgrades. Enterprises, industrial facilities, and access networks use lower-speed modules to build campus connectivity and short-distance links where high bandwidth is unnecessary. Telecom operators use these transceiver-specific fronthaul and backhaul applications. Their energy efficiency, dependability, and compatibility with existing systems drive active adoption in a wide range of networking environments. For example, in September 2025, VIAVI Solutions released two new handheld testers, expanding its portable device lineup for last-mile fiber activation and multi-gig power testing at data rates up to 10 Gbps.
Based on the Application: the telecommunications industry drives demand for optical transceivers as operators expand 5G networks, upgrade metro and core infrastructure, and deploy fiber-to-the-home and fiber-to-the-tower systems. The demand for high-bandwidth, low-latency optical links is driven by rising mobile data traffic, expanding cloud services, and the proliferation of IoT applications. Telecom companies use advanced coherent and pluggable optics to increase network capacity, reliability, and energy efficiency. Government broadband initiatives and competitive pressures to improve service quality have accelerated the deployment of optical transceivers across telecom networks.
In April 2025, Jabil Inc. launched 1.6T transceivers to support Al/ML workloads, HPC, cloud computing, and high-speed data center interconnects, expanding their photonics portfolio.
Optical Transceiver Market- Geographical Insights
The North American optical transceiver market is expanding as hyperscale data centers expand and organizations embrace AI and cloud computing. Telecom operators are modernizing networks with 5G rollouts, fiber deployments, and metro-core upgrades, increasing demand for advanced optical modules. The region is at the forefront of the adoption of high-speed coherent optics, silicon photonics, and energy-efficient transceivers. Increasing digital traffic, government broadband initiatives, and enterprise network transformations are all driving market activity, establishing North America as a key hub for innovation and large-scale optical transceiver deployment. For instance, in October 2025, Credo Technology Group Holding Ltd introduced its ZeroFlap (ZF) optical transceiver line, which provides secure, high-speed connectivity with improved reliability and energy efficiency while supporting 400G, 800G, and 1.6T network speeds.
United States Optical Transceiver Market- Country Insights
The US optical transceiver market is rapidly expanding as cloud service providers, enterprises, and telecom operators build high-speed networks. Hyperscale data center expansion and AI-driven workloads increase demand for advanced optical modules with high bandwidth and low latency. Telecom companies are deploying 5G infrastructure and upgrading fiber networks, while enterprises are updating campus and metro systems. Focusing on energy-efficient and scalable solutions encourages the use of optics and silicon photonics, establishing the United States as a key hub for innovation and large-scale optical transceiver deployment. For instance, in April 2025, Jabil Inc. introduced 1.6T transceivers, which transmit data at 1.6 Terabits per second, expanding its photonics portfolio to support growing AI/ML workloads, HPC, cloud computing, and high-speed data center interconnects.
The optical transceiver market competitive landscape is characterized by intense competition, rapid technological innovation, and a strong focus on high-speed and energy-efficient solutions. Key players are investing heavily in R&D to develop advanced transceivers supporting 100G, 400G, and emerging 800G technologies to meet rising data center and telecom network demands. Strategic partnerships, product launches, and capacity expansions are common as companies aim to strengthen their global presence and address hyperscale and 5G-related requirements. Leading companies operating in this market include Cisco Systems, Inc., Broadcom Inc., Lumentum Holdings Inc., and II-VI Incorporated (Coherent Corp.). These players compete on performance, reliability, scalability, and cost efficiency, shaping the market through continuous innovation and strategic collaborations.
In November, 2023, Lumentum Operations LLC, a manufacturer of optical and photonic products, acquired Cloud Light Technology Limited, a manufacturer of optical fiber transceivers, optical sensors, and solutions, for nearly USD 750 million. With this acquisition, Lumentum will increase its cloud data center infrastructure revenue in the coming months.
In March, 2023, Eoptolink Technology Inc., Ltd., a leading supplier of optical transceiver solutions and services, has added BIDI MM transceivers to its multimode product portfolio. The portfolio includes 800G SR4.2, 400G SR4.2, and 100G SR1.2 transceivers.