Optoelectronics Market Size, Share & COVID-19 Impact Analysis, By Product Type (Optical Information Instruments, Optical Sources & Optoelectronics Devices, Optical Communication, Precision Instruments, Optical Materials, and Optical Instruments), By Application (Residential and Industrial), and Regional Forecast, 2023-2030

The global optoelectronics market size was valued at USD 44.84 billion in 2022 and is projected to grow from USD 46.88 billion in 2023 to USD 73.83 billion by 2030, exhibiting a CAGR of 6.7% during the forecast period. North America dominated the global market with a share of 55.66% in 2022.

Global optoelectronics is a subfield of photonics that finds, detects, and controls the flow of light with light emitting or light detecting devices. Optoelectronics manufacturing has flourished in recent years with the rising use of optical communication technology such as optical fiber and optical network systems. These devices changed the growth trajectory of the industry with a 5G network and autonomous vehicle technology.

Furthermore, the rising application of data centers and light-emitting diodes in the data and display industry has expanded the potential of optoelectronics. The evolution of display technology, which offers a more advanced and ultra-high definition for enhanced visual experience, raises the demand for optical display instruments during the forecast period.

COVID-19 IMPACT

Low Demand for Displays Impacted the Sales of Displays in Short Term

The pandemic led to a decline in the growth of the global economy with a halt in trade and disturbed supply, leading to a decline in the sales of electronics and semiconductors globally. The drop in manufacturing activities owing to a shortfall of resources impacted the sales of display technologies. However, a strong demand overcame the backlogs of the pandemic and pushed the sales of optoelectronic devices.

LATEST TRENDS

Need for Better Transmission Capacity Drives the Trend of Modern Optical Industry

The industry has observed a big transition from a small-unit device to a broad-level integration and large-scale photonics integration to modern chipsets. Furthermore, there has been a rising need for a higher transmission capacity of optical fibers in the optical communication industry. This drives the popularity of photonic-integrated chipsets across industrial optical communication that boosts optoelectronics market growth in the long term.

• For instance, in October 2023, STL, a global leader in optical technology and digital solution provider, developed the slimmest fiber micron 160 optical fiber. The optical fiber is capable of providing more optical wavelength than 250-micron fiber and can reduce the time of deployment by 30%.

OPTOELECTRONICS MARKET GROWTH FACTORS

Integration of LED Systems and Advanced Display Solutions to Drive Product Demand

Light-emitting diode (LED) technology has revolutionized the global LED lighting and display industry with advanced retina displays that offer high brightness and better color exposure. The advanced retina display solution and rise in demand for connected infotainment solutions in the automotive segment owing to advanced touch ability and voice interaction integration have affected market growth during the forecast period.

• For instance, in January 2023, Samsung Electronics, an advanced electronics and semiconductor solutions provider, advanced the screen revolution with the NeoQLED, OLED, and MICRO LED lineup.

RESTRAINING FACTORS

Technological Complexity and Obsolescence May Impede Market Growth

The rapid pace of technological advancements in the display and electronic information instrument industry puts pressure on the electronics industry and can affect product demand. In addition, the increasing compactness of electronic devices needs more compact optical components that need high investment and research to develop new products. These factors may impede market expansion in the short term.

SEGMENTATION

By Product Type Analysis

Growing Demand In 5G Industry is Boosting the Optical Information Instruments Segment Growth

Based on product type, the optoelectronics market is classified into optical information instruments, optical sources & optoelectronics devices, optical communication, precision instruments, optical materials, and optical instruments.

Optoelectronics devices are a critical component in the displays industry that helps to optimize the battery performance in electronic devices by optimal display.

The optical information instruments segment is estimated to grow progressively, securing the largest market share. This is due to the increasing deployment of 5G technology and electronics that use optoelectronic components for the retina display solution in mobile phones and electronic devices. Furthermore, the increasing use of image sensors in medical applications for medical imaging, such as optical coherence tomography (OCT) and endoscopy, drives product demand.

The optical sources and optoelectronics devices segment is estimated to grow extensively due to their prominent use in optical storage devices such as Bluray and achievable optical discs. There is a growing need for optical communication devices and precision instruments in fiber optic communication for reliable and high-speed data transmission. The demand for precision measurement instruments is expected to bolster market growth.

By Application Analysis

Growing Trend for Fiber Optics Bolstering the Demand in Industrial Sector

Based on application, the market is classified into residential and industrial.

The industrial segment grows extensively and dominates the market owing to the increasing use of fiber optical and optical instruments in data centers and optimal computing for more efficient data processing. The increasing promotion regarding the adoption of electronic control modules (ECM) in the automotive industry is the major factor favoring the dominance of the segment, and the market is expected to have major growth.

The increasing connectivity to the home networks with fiber optics communication systems subsequently raises the demand for optical electronics components demand in the residential sector during the forecast period.

REGIONAL INSIGHTS

The global market is classified into North America, Europe, Asia Pacific, the Middle East & Africa, and South America.

The market has recovered positively in the post-pandemic period, driving the global demand owing to a rise in internet penetration and deployment of 5G technology globally. Furthermore, the rise in internet subscribers and demand for fiber optic communication systems for increased bandwidth across regions globally bolstered the optoelectronics market share over the forecast period.

Asia Pacific is leading the industry and has a major growth in market share owing to the strong semiconductor manufacturing base in China, India, Japan, South Korea, and the rest of Asia Pacific. The growing demand of consumer electronics such as displays, cameras, and other optoelectronic components primarily drove the growth.

China is slated to record the largest market share. This is due to increasing technological advancements and rapid adoption of technology, which leads to swift market penetration for innovative optical electronics products.

North America is estimated to grow progressively owing to its large tech-savvy consumer base that drives the demand for optoelectronics information systems in the long term. Furthermore, the dominant technological innovation clusters in the U.S. due to companies such as Intel, Apple, and other tech giants having their manufacturing and headquarters drive the demand significantly.

Europe is estimated to grow moderately owing to an emphasis on green technological solutions and sustainability for developing energy-efficient optoelectronic solutions. Furthermore, it has a stronger presence in advanced manufacturing technologies in Germany, France, Italy, and other European regions.

The Middle East & Africa region is estimated to grow steadily due to various applications of the product, including telecommunications in network infrastructure development and optical signage. This drives the demand for optoelectronics components in the long term.

South America is set to grow significantly with increasing demand for consumer electronics and automotive appliances. The increasing investment in communication networks and transportation further drives regional growth.

KEY INDUSTRY PLAYERS

Major Players Focus on Expanding Product Portfolio with Innovative Products to Cater to Changing Consumer Needs

Prominent players in the market are heavily investing in product portfolio expansion to serve the changing consumer needs, driving demand for optical electronics components such as optical transceivers and sensors. With a large number of domestic and international players, the market is highly fragmented.

List of Key Companies Profiled in Optoelectronics Market: 

• Broadcom (U.S.)


• Samsung (South Korea)


• Intel (U.S.)


• Texas Instruments (U.S.)


• Applied Materials (U.S.)


• Lam Research (U.S.)


• Synopsys (U.S.)


• Renesas (Japan)


• Rohm (Japan)


• Coherent (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• June 2023: STMicroelectronics, a prominent semiconductor manufacturer, signed an agreement with Sanan Optoelectronics to advance the manufacturing and development of Silicon Carbide ecosystems across China.


• April 2023: ROHM, a leading semiconductor and electronic component manufacturer, developed 4ch/6ch LED drivers for medium to large-size automotive displays. The solution would use 20% less power than conventional drivers.


• March 2023: Broadcom, the industry’s leading semiconductor manufacturer, launched a 5nm 100G/lane optical PAM-4 integrated trans-impedance amplifier (TIA) and laser driver. It was specially designed for superior performance to hyperscale data centers and cloud providers.


• December 2022: Microsoft, the world’s leading software solution provider, acquired Lumensity, a pioneer in optical fiber cable manufacturing, aiming to peak the next-generation communication technology with hollow-core optical fiber.


• August 2022: Broadcom Inc. declared a strategic partnership with Tencent Holdings Ltd. to bolster the adoption of co-packaged optics (CPO). These high-bandwidth network switches were developed for the cloud infrastructure. Tencent Co. jointly develops the hardware and software to deploy the CPO Switch system.

REPORT COVERAGE

The optoelectronics market report provides a detailed market analysis and focuses on key aspects such as leading companies, product/service types, and leading product applications. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the market’s growth in recent years.

Report Scope & Segmentation