PUBLISHER: The Business Research Company | PRODUCT CODE: 1852533
PUBLISHER: The Business Research Company | PRODUCT CODE: 1852533
Optical interconnect is a communication technology that transmits data using light signals through optical fibers or photonic devices instead of traditional electrical wiring. By using photons rather than electrons, it enables higher data transfer speeds, increased bandwidth, and reduced signal degradation, making it essential for high-performance computing, data centers, and advanced telecommunications networks.
The main product types in optical interconnect include cable assemblies, connectors, optical transceivers, silicon photonics, optical engines, photonic integrated circuit-based interconnects, free-space optics, fibers, and waveguides. Cable assemblies are prefabricated bundles of cables with attached connectors, designed to transmit signals efficiently and reliably. They include single-mode fiber (SMF) and multimode fiber (MMF) and are applied across metro and long-haul networks, board or rack-level, and chip or board-level interconnects. Technologies used include optical waveguides, optical fibers, vertical-cavity surface-emitting lasers (VCSELs), optical transceivers, and optical switches, supporting applications in data centers, telecommunications, high-performance computing, consumer electronics, and automotive
Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report's Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.
The rapid rise in U.S. tariffs and the subsequent trade frictions in spring 2025 are having a major impact on the electrical and electronics sector, with semiconductors, display panels, and rare-earth metals (essential for batteries and motors) subject to steep duties. Consumer electronics brands face profit erosion, as competitive markets limit their ability to pass costs to buyers. Industrial electronics manufacturers, meanwhile, grapple with delayed projects due to shortages of tariff-impacted components like printed circuit boards. Companies are responding by relocating assembly to tariff-exempt countries, increasing inventory buffers, and redesigning products to reduce dependency on restricted materials.
The optical interconnect market research report is one of a series of new reports from The Business Research Company that provides optical interconnect market statistics, including optical interconnect industry global market size, regional shares, competitors with an optical interconnect market share, detailed optical interconnect market segments, market trends and opportunities, and any further data you may need to thrive in the optical interconnect industry. This optical interconnect market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.
The optical interconnect market size has grown rapidly in recent years. It will grow from $12.23 billion in 2024 to $13.69 billion in 2025 at a compound annual growth rate (CAGR) of 11.9%. The growth during the historic period can be attributed to rising demand for cloud computing, increasing bandwidth requirements, expansion of 5G networks, growth of data centers, and higher demand for internet services.
The optical interconnect market size is expected to see rapid growth in the next few years. It will grow to $21.15 billion in 2029 at a compound annual growth rate (CAGR) of 11.5%. The growth during the forecast period is expected to result from the expansion of quantum computing networks, growth of edge computing infrastructure, rising hyperscale cloud investments, increasing demand for energy-efficient solutions, and higher network traffic from both private and government sectors. Key trends in this period include advancements in silicon photonics, development of co-packaged optics, innovations in 800G/1.6T transceivers, growth of AI-driven data centers, and progress in quantum communication applications.
The rapid expansion of 5G networks is expected to drive growth in the optical interconnect market. 5G networks provide faster data speeds, lower latency, and support for massive device connectivity and advanced applications such as IoT and smart cities. Their expansion is accelerating to accommodate the growing number of connected devices in the IoT ecosystem, enabling seamless communication, real-time data exchange, and smarter automation across industries. Optical interconnects support 5G networks by providing fast, low-latency, and reliable data links between network elements, ensuring efficient connectivity for high-density networks and real-time services. For example, according to 5G Americas, North America is expected to reach 289 million 5G connections by the end of 2024, a 67% increase from 196 million connections at the end of 2023. The rapid growth of 5G networks is therefore fueling demand for optical interconnect solutions.
Companies in the optical interconnect market are developing optical interconnect chiplets to enhance data transfer speeds, reduce latency, and improve energy efficiency in high-performance computing and data center applications. Optical interconnect chiplets are compact semiconductor modules that use light signals to transfer data between or within chips, increasing bandwidth, reducing latency, and lowering power consumption. In April 2025, Ayar Labs launched the TeraPHY optical I/O chiplet, the world's first Universal Chiplet Interconnect Express (UCIe) optical chiplet. It integrates silicon photonics with CMOS manufacturing, delivering 8 Tbps bandwidth using a 16-wavelength SuperNova light source. Designed for AI scale-up architectures, it addresses data bottlenecks by enabling ultra-high-speed optical interconnects between chiplets while reducing latency and power usage. The chiplet supports the UCIe open standard, promoting compatibility and a cost-effective ecosystem for optical technologies.
In May 2025, Advanced Micro Devices Inc. (AMD) acquired Enosemi Inc. to strengthen its photonic interconnect and AI hardware capabilities. The acquisition allows AMD to leverage Enosemi's expertise in photonic integrated circuits and co-packaged optics, enabling high-bandwidth, energy-efficient interconnect solutions that integrate compute and networking for advanced AI workloads. Enosemi is a US-based startup specializing in high-speed optical interconnect technology and photonic integrated circuit design and development.
Major players in the optical interconnect market are Huawei Technologies Co. Ltd., Cisco Systems Inc., Sumitomo Electric Industries Ltd., Mitsubishi Electric Corporation, Broadcom Inc., ZTE Corporation, TE Connectivity Ltd., Corning Incorporated, Amphenol Corporation, Furukawa Electric Co. Ltd., Ciena Corporation, Lumentum Holdings Inc., ADTRAN Inc., POET Technologies Inc., Accelink Technologies Co. Ltd., Linktel Technologies, Fibermall Technologies Co. Ltd., Ayar Labs Inc., LightSpeed Photonics Inc., FluxLight Inc., Ranovus Inc., Lightwave Logic Inc., and Yuanjie Technology Co. Ltd.
North America was the largest region in the optical interconnect market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in optical interconnect report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The countries covered in the optical interconnect market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The optical interconnect market consists of revenues earned by entities by providing services such as high-speed data transmission, long-distance communication, high bandwidth connectivity, and signal integrity maintenance. The market value includes the value of related goods sold by the service provider or included within the service offering. The optical interconnect market also includes sales of optical amplifiers, wavelength division multiplexers, optical modulators, optical receivers, and optical transponders. Values in this market are 'factory gate' values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Optical Interconnect Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on optical interconnect market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for optical interconnect ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The optical interconnect market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The forecasts are made after considering the major factors currently impacting the market. These include the technological advancements such as AI and automation, Russia-Ukraine war, trade tariffs (government-imposed import/export duties), elevated inflation and interest rates.
1) By Cable Assemblies; Single Mode Cable; Multi Mode Cable; Armored Cable; Breakout Cable; Ribbon Cable
2) By Connectors; Lucent Connector; Straight Tip Connector; Subscriber Connector; Mechanical Transfer Registered Jack; Small Form Factor Pluggable Connector
3) By Optical Transceivers; Small Form Factor Pluggable Transceiver; Quad Small Form Factor Pluggable Transceiver; Enhanced Small Form Factor Pluggable Transceiver; Compact Small Form Factor Pluggable Transceiver
4) By Silicon Photonics; Transmitters; Receivers; Modulators; Photodetectors; Waveguides
5) By Optical Engines; Analog Optical Engine; Digital Optical Engine; Hybrid Optical Engine
6) By Photonic Integrated Circuits-Based Interconnects; Monolithic Photonic Integrated Circuits; Hybrid Photonic Integrated Circuits; Heterogeneous Photonic Integrated Circuits
7) By Free Space Optics; Point To Point Free Space Optics; Point To Multipoint Free Space Optics
8) By Fibers And Waveguides; Optical Fibers; Planar Waveguides; Photonic Crystal Fibers; Hollow Core Fibers