Active optical cables, embedded optical modules to see revenue growth through 2023 according to LightCounting

LightCounting has released the two-part “2018 Active Optical Cable and Embedded Optical Modules Market Analysis and Forecast Report,” in which it calls for steady revenue growth in both segments through 2023 – albeit, in the case of active optical cables (AOCs), with a bit less vigor than previously.

Price declines will offset the growth in AOC shipments in some years, according to the market research firm. For example, the latest report predicts approximately 30% more unit shipments in 2022 than last year’s edition. However, the new revenue forecast for 2022 is 18% smaller than that included in last year’s report, thanks to price reductions as well as a greater percentage of single-channel AOC purchases. The fact that Chinese and other data center operators frequently use single-channel AOCs to connect servers to first tier switches accounts for the expected uptick in purchases of such links. Meanwhile, Chinese data center operators usually don’t use AOCs to connect switches, which dampens the potential demand for Ethernet four-channel AOCs typically used in such applications, the market research firm explains.

Meanwhile, LightCounting sees the high-performance computing (HPC) and data center segments rapidly adopting 100G AOCs. The market research firm believes the HPC space will begin to move toward 200G AOCs this year. However, it doesn’t see the data center market adopting 200G Ethernet AOCs with the same enthusiasm.

Within the electro-optic module (EOM) space, LightCounting analysts expect the technology’s bumpy ride this decade will smooth into a nice revenue growth path. EOMs provide connectivity within custom supercomputers, telecom equipment, and the largest core routers. LightCounting is more optimistic about the technology this year, predicting the 2022 EOM market will see about 20% more unit shipments and 29% more revenue than the firm’s analysts did last year. The report authors foresee annual growth rates increasing strongly by 2020, with revenues increasing from $136 million in 2018 to $543 million in 2023.