An optical transceiver is an integrated circuit chip (IC) that transmits and receives data with the help of a fiber optic cable rather than an electrical wire. A fiber optic cable transmits high speed and large volumes of data efficiently with the help of light beams and pulses along solid transparent cables. An optical transceiver chip is made of specialized semiconductor materials including indium phosphide and gallium arsenide and it is smaller in size and consumes negligible amount of power.

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Optical transceivers are considered to be the backbone of network systems. A sizeable number of electronic systems, servers, and communication devices are dependent on high speed serial receivers. The optical transceiver consists of a transmitter and a receiver, both operating independently. The transmitter first converts the electrical signal into an optical signal which is then transmitted with the help of a fiber optic cable. At the receiving end of the cable, the optical signal is converted back into an electrical signal with the help of a receiver. Optical transceivers facilitate the handling of data, voice, and video traffic and it provides a link between enterprise networks to networks, data center to data center, and bottom to top of rack which enables transmission of data in a greater network at a lower cost. Optical transceivers are also used in telephone communications and digital television broadcasts.

The increasing adoption of the internet is said to be the primary driver for the growth of the optical transceivers market. Internet requires high speed transmission of high volume of data efficiently, and hence fiber optics is deployed to meet this requirement. The rapid expansion of data centers which support streaming videos, cloud services, social networking, and online commerce is another factor which is fuelling the growth of the market. It has been observed that many large scale enterprises are now increasingly dependent on cloud services. This is leading to a spike in demand for high bandwidth and advanced networks which is expected to ultimately fuel the growth of the optical transceivers market. Another factor that is driving the growth of the market is the increasing demand for communication devices such as mobiles, tablets, and wearable. Other factors contributing to the growth of the market include the growth of software as a service (SaaS) and the prominent role of fiber optics which employ optical transceivers in the finance industry which involves data receival and transmission at lightening speed. However, the rising labor cost is expected to hamper the growth of the optical transceivers market. Nevertheless, the growing demand for high speed applications and services requiring high bandwidth arising due to the advent of 4G and 5G technology is said to positively impact the optical transceivers market.

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The optical transceivers market has been segmented on the basis of application, wavelength, data rate, and geography. Based on application, the optical transceivers market is divided into telecom, data center, and enterprise. On the basis of wavelength, the market is segmented into 850nm, 1310nm, and 1550nm. Depending on the data rate, the market is bifurcated into 1G, 10G, 40G, and 100G. In terms of geography, the optical transceivers market has been divided into North America, Asia Pacific, Europe, Middle East & Africa, and South America.

Some of the major players in the optical transceivers market include Sumitomo, Vitesse, Agilent Technologies, NTT, Fujitsu, Cube Optics, Reflex Photonics, GigPeak, Huawei, IPG Photonics, Broadcom Oclaro, Finisar Lumentum, Acacia, Emcore, Furukawa Electric, Broadcom, NeoPhotonics, and Accelink Technologies.

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