5G Wireless and Quantum Dot Technology Expediting Innovation in Optical Transceivers

The implementation of 5G wireless is anticipated to deliver new services in high-speed optical networks such as augmented reality and industrial IoT. As such, optical transceivers are projected to dominate the transceiver market with the highest revenue, estimated at a record ~US$ 36.8 billion by the end of 2027. Hence, manufacturers in the transceiver market are tapping into opportunities in machine learning, and the development of advanced drones and self-driving vehicles. The growing demand for 5G is catalyzing the demand for high-speed optical connectivity in cloud data centers.

On the other hand, manufacturers are innovating in new optical transceiver chiplets to integrate lasers with electro-photonic silicon chips. For instance, in September 2019, ADVA - a telecommunications company, announced the developing of novel optical transceiver chiplets to cater to the increasing demand for bandwidth in data center interconnect networks.

Companies in the transceiver market are adopting quantum dot technology to create compact-size devices. They are increasing focus on developing miniaturized optical transceivers that are cost-effective and support transmitter-receiver optical sub-assemblies for inter-data center applications.

transceiver market infographic

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Increased Application of Transceivers in EW Systems and IT Boost Sales

The transceiver market is estimated to witness growth in electronic warfare and other applications. There is growing demand for transceivers that offer flexibility in electronic warfare (EW) systems. Companies in the transceiver market are introducing new wideband microwave transceivers that offer immediate-frequency bandwidth in RF (radio frequency) modules. Innovations in wideband microwave transceivers are benefitting stakeholders in the defense landscape by helping them deploy spectrum monitoring and beamforming in EW systems.

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Companies are increasing research efforts to maximize system flexibility by developing transceivers that integrate with multiple interfaces. They are increasing R&D to analyze mobile RF front-end architectures of smartphones to support global LTE (long term evolution) standards in the IT and telecommunications landscape. As such, IT and telecommunications accounts for the highest sale of transceivers, and is estimated to reach a value of ~US$ 12.7 billion by 2022, in the transceiver market.

Manufacturers are onboarding the best researchers to develop transceivers that offer quality communications and cost-efficient scalability. They are increasing production capacities to develop advanced transceivers that transform 5G wireless equipment, such as smartphones and tablets, and are being increasingly used in IoT applications. Companies are introducing new frequency bands in transceivers that support 5G applications.

Tunable Transceivers Serve as Alternative to Static Counterparts to Reduce Downtime

There is growing demand for tunable devices in the rapidly expanding networking technology landscape. Manufacturers are innovating cutting-edge technology that provides on-site wavelength adjustment in tunable transceivers. Static transceivers require multiple backups to reduce downtime in the DWDM (dense wavelength division multiplexing) space. Hence, tunable transceivers are an efficient alternative to their static counterparts, since the former offer more flexibility in optical networking.

The burgeoning growth of networking technology is triggering the sales of tunable transceivers in the global transceiver market. However, tunable transceivers cost more than static transceivers. Tunable transceiver technology also presents a challenge for operators attempting to interface tunable transceivers with legacy equipment. To win over these limitations, companies are introducing transceiver management modules, AKA tuning boxes, to host tunable transceivers in various DWDM environments. The efficacy of tuning boxes is leveraged with the help of tuning software to reinforce on-the-go tuning through proprietary mobile tuning applications.

Automotive Ethernet Transceivers Translate into Incremental Opportunities across In-vehicle Networks

The automotive industry accounts for the second-highest revenue amongst all end-use industries in the transceiver market that require technologically-advanced transceivers. Companies in the landscape are developing new Ethernet PHY (physical layer) transceivers that are standard-complaint and interoperable in automotive technology. These efforts are being made to offer sleep and wake-up-forwarding functionality in vehicles.

Ethernet PHY transceivers are helping automotive manufacturers reach their end goal of high efficiency in future electric vehicle architectures. Besides car brands such as BMW, JLR, and VW, automotive manufacturers are augmenting the application of Ethernet in infotainment, telematics, and ADAS (advanced driver-assistance systems) for other automobile companies. The trend of connected cars is further catalyzing market growth.

transceiver market segmentation

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Analysts’ Viewpoint

Analysts of the transceiver market opine that, optical transceivers are gaining far-reaching applications in networking and IT applications. SFP+ transceivers are predicted to account for the highest revenue amongst all form factors in the market landscape. Hence, manufacturers are innovating in new interfaces of tunable transceiver technology that complement well with tunable SFP+ transceivers.

However, challenges of base station receiver design pose a hurdle to manufacturers. Hence, they should develop novel integrated transceivers that offer desired sensitivity under specific conditions in base station receiver designs. Manufacturers should capitalize on the trend of 5G wireless to develop built-in gain phase calibration that minimizes radiation and boosts signal strength in devices.

Global Transceiver Market: Overview

  • According to Transparency Market Research’s latest research report on the global transceiver market for the historical period of 2017–2018 and the forecast period of 2019–2027, the growing adoption of transceivers across various applications in automotive and telecommunication industries, and various benefits associated with transceivers, especially reduced size and high stability at high temperatures, are expected to boost the global transceiver market during the forecast period.
  • In terms of revenue, the global transceiver market is estimated to reach a value of ~US$ 56.4 Bn by 2027, expanding at a CAGR of ~6% throughout the forecast period.
  • In terms of volume, the global transceiver market is estimated to reach ~18,700 million units by 2027, expanding at a CAGR of ~5% during the forecast period.

Rapid Expansion of Data Centers: A Key Transceiver Market Driver

  • A data center is a critical facility, wherein, organizations around the world place their important data as well as applications. It primarily consists of a network of several computers and other resources used for information sharing.
  • Increase in the number of data centers has been observed across the globe, owing to the emergence of various social media networking sites, cloud services, high-end games, HD video streaming, and 5G technology. Currently, data centers are constantly being upgraded technologically in order to support a large amount of data traffic generated through the above-mentioned applications.
  • The demand for transceivers, especially those that support data rate of 100 G, is rising across the globe, owing to the continuous evolution of data centers, worldwide. Furthermore, transceivers help these evolving data centers in achieving smooth network performance as well as internal data transmission.
  • Rapid expansion of data centers across the globe, which includes data center architecture upgrades, is projected to boost the demand for transceivers in the near future. 

Rising Demand of Optical Transceivers: Latest Trend in Transceiver Market

  • A transceiver transmits as well as receives signals, with a joint circuitry over a network. An optical transceiver transmits signals by using fiber optic technology. It has components to convert an electric signal into pulses of light.
  • The demand for optical transceivers or fiber optic transceivers is rising, worldwide, owing to high use of optic components by various organizations to manage increased data traffic. Furthermore, increase in data traffic is attributable to the emergence of 4G and 5G network technologies that are generating a large volume of data, worldwide, via smartphones, tablets, and wearable devices.
  • Moreover, industries such as IT & telecommunications are prominently using optical transceivers as a result of the increasing use of optic components in these industries to handle the large volume of data generated from high-end applications. Additionally, the rising demand for optical transceivers, which supports high data rates, leads to growth of various manufacturers of optical transceivers. For instance, Finisar Corporation witnessed US$ 100 Mn of increase in revenue in the year 2018 from its optical transceivers working at a data rate of 100 Gbps. However, revenues from 10-Gbps and 40-Gbps transceivers reduced by US$ 103 Mn in 2018, due to the lower demand for these products. 

Testing of Transceivers: Major Challenge for Global Transceiver Market

  • Data centers across the world are evolving from low-computing networking technologies to significantly higher-computing networking technologies. Transceivers play a critical role in support of this evolution. However, the quality as well as proper testing of transceivers is highly important in order to achieve this.
  • Transceivers help data centers in the transformation from 100 Gigabits to 400 Gigabits to increase network bandwidth capacity. However, technological evolution of data centers increases the networking complexity and creates several test challenges for transceivers.
  • Testing challenges affect the interoperability of transceivers with networking components, as multiple vendors build transceivers with different specifications. Furthermore, improper testing affects the functional capabilities of transceivers, which can affect data transmission.
  • Challenges in the testing of transceivers due to increase in networking complexity are projected to have a negative impact on the global transceiver market during the forecast period. The impact is low due to the emergence of innovative methods to increase test efficiency in order to overcome various testing challenges. 

Global Transceiver Market: Competition Landscape

  • Detailed profiles of the providers of transceivers have been provided in the report to evaluate their financials, key product offerings, recent developments, and strategies.
  • The global transceiver market is fragmented in nature, with the presence of a large number of well-established as well as emerging players, especially in countries such as China and Japan. Key players operating in the global transceiver market are
    • Texas Instruments Inc.
    • NCP Semiconductors
    • Finisar Corporation
    • Lumentum Operations LLC. 

Global Transceiver Market: Key Developments

  • Well-established players strive to gain a competitive edge by developing innovative products that cater to multiple applications.
    • For instance, in March 2019, Texas Instruments Incorporated, a designer and manufacturer of transceivers, launched new RF-sampling transceivers that can be integrated with four analog-to-digital converters (ADCs) and four digital-to-analog converters (DACs) in a single chip.

In the report on the global transceiver market, we have discussed individual strategies, followed by company profiles of providers of transceivers. The ‘Competition Landscape’ section of the global transceiver market has been included in the report to provide readers with a dashboard view and market share analysis of key players operating in the global transceiver market.

Transceiver Market: Scope of the Report

A new study on the global transceiver market has been published by Transparency Market Research (TMR). It presents detailed information of key market dynamics, including the market drivers, trends, and challenges, as well as the structure of the global transceiver market. TMR’s study offers valuable information on the global transceiver market in order to illustrate how the market is expected to expand during the forecast period, i.e. 2019–2027.

Key indicators of market growth, which include value chain analysis, supply chain analysis, and compounded annual growth rate (CAGR), are elucidated in TMR’s study in a comprehensive manner. This data can help readers interpret the quantitative growth aspects of the global transceiver market during the forecast period.

An extensive analysis of the business strategies adopted by leading market players is also featured in TMR’s study on the global transceiver market. This can help readers understand the key factors responsible for the growth of the global transceiver market. In this study, readers can also find specific data on avenues for the qualitative and quantitative growth of the global transceiver market. This data can guide market players in making apt business decisions for the future.

Key Questions Answered in TMR’s Study on Global Transceiver Market

  • What would be the Y-o-Y growth trend of the global transceiver market from 2019 and 2027?
  • What is the influence of the changing trends in technologies on the global transceiver market?
  • Would Asia Pacific continue to remain the most profitable regional market for providers of transceivers in the near future?
  • Which factors would hinder the global transceiver market during the forecast period of 2019 to 2027?
  • Which are the leading companies operating in the global transceiver market?

Global Transceiver Market: Research Methodology

A unique research methodology is utilized by TMR to conduct comprehensive research on the global transceiver market, and arrive at conclusions on the future growth prospects of the market. This research methodology is a combination of primary and secondary research, which helps analysts warrant the accuracy and reliability of the conclusions drawn.

Secondary research sources referred to by analysts during the production of the report on the global transceiver market include statistics from company annual reports, SEC filings, company websites, World Bank database, investor presentations, regulatory databases, government publications, and market white papers. Analysts have also interviewed senior managers, product portfolio managers, CEOs, VPs, and market intelligence managers, who have contributed to the production of TMR’s study on the global transceiver market, as a primary research source.

These primary and secondary sources provided exclusive information during interviews, which served as a validation from leading players operating in the global transceiver market. Access to an extensive internal repository as well as external proprietary databases allowed this report to address specific details and questions about the global transceiver market with accuracy. The study also uses a top-down approach to assess the numbers for each segment, and a bottom-up approach to counter-validate them. This has helped in making TMR’s estimates on the future prospects of the global transceiver market more reliable and accurate.

Segmentation of Global Transceiver Market

TMR’s study of the global transceiver market segments the market based on type, form factor, end-use industry, and region. Changing market trends and other crucial market dynamics that are associated with the segments of the global transceiver market have been discussed in detail.

Type

Optical Transceivers

Ethernet Transceivers

RF Transceivers

CAN Transceivers

Others

Form Factor

SFP

SFP+

XFP

QSFP

QSFP+

CFP

Others

End-use Industry

Healthcare

Automotive

Oil & Gas

IT & Telecommunications

Others

Region

North America

Europe

Asia Pacific

Middle East & Africa

South America

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