Global Optical Interconnects Market Size, Share and Forecasts 2030

Key Findings

• Optical interconnects enable high-speed data transfer using light instead of traditional electrical signals, significantly reducing latency, power consumption, and heat generation in data-intensive applications.

• They are widely adopted in hyperscale data centers, AI/ML workloads, high-performance computing (HPC), and next-generation telecom networks requiring massive bandwidth scalability.

• The shift toward cloud computing, 5G rollout, and edge data processing has accelerated demand for optical interconnects in servers, switches, and chip-to-chip communication.

• Silicon photonics-based optical interconnect solutions are gaining traction due to their scalability, integration potential, and cost-efficiency for mass deployment.

• Key players such as Intel, Cisco, Broadcom, NVIDIA, and Infinera are advancing optical interconnect technology for high-density, low-power, and high-bandwidth connectivity.

• North America and Asia-Pacific lead adoption due to hyperscale data center expansions and strong semiconductor and telecom ecosystems.

• Emerging R&D is focusing on co-packaged optics, integrated photonic circuits, and next-generation fiber optics with ultra-low loss.

• The technology is transitioning from high-performance computing to mainstream adoption across industries as digital transformation accelerates.

Optical Interconnects Market Size and Forecast

The global optical interconnects market was valued at USD 12.4 billion in 2024 and is projected to reach USD 41.6 billion by 2030, growing at a CAGRof 22.5%during the forecast period.

The market expansion is driven by rapid growth in AI workloads, big data analytics, and demand for faster data center interconnections. Optical interconnects provide high bandwidth and low latency, addressing bottlenecks in electrical interconnects.Increased deployment in 5G, IoT, and autonomous systems also contributes to strong growth. Investments in silicon photonics and co-packaged optics are further fueling the scalability of optical interconnect technology across industries.

Market Overview

Optical interconnects represent a paradigm shift in data communication infrastructure, replacing traditional copper-based connections with optical links for enhanced performance. These systems offer higher transmission speeds, lower energy consumption, and longer reach, making them critical for next-generation computing and communication systems.

The rise of AI-driven computing, real-time analytics, and streaming services is intensifying the need for efficient interconnect solutions in data centers and enterprise networks. Optical technologies deliver the performance required to sustain these workloads without the limitations of electrical signaling.

With continued advancements in photonic integration and ecosystem collaboration between semiconductor and networking companies, optical interconnects are becoming increasingly cost-competitive. This trend ensures their adoption across a wide range of applications from HPC to mainstream cloud services.

Optical Interconnects Market Trends

• Adoption of Silicon Photonics for Scalability and Integration:
  Silicon photonics is transforming the optical interconnect landscape by enabling low-cost, scalable, and compact solutions for high-bandwidth connectivity. This trend is particularly relevant in hyperscale data centers where integration and efficiency are essential. The technology also provides a pathway for co-packaged optics, reducing the distance between compute and interconnect functions while minimizing power losses. As ecosystems mature, silicon photonics is expected to dominate next-generation interconnects.

• Rise of Co-Packaged Optics in Data Centers:
  Co-packaged optics is emerging as a major trend in addressing bandwidth bottlenecks in data centers. By tightly integrating optical engines with switching silicon, co-packaged optics enhances efficiency and power consumption in high-density environments. This development supports the scalability of 400G, 800G, and future terabit interconnects. Vendors and hyperscalers are increasingly collaborating to establish standards and accelerate deployment, making it a focal point of R&D investments.

• Growing Role in AI and HPC Workloads:
  Optical interconnects are critical for AI and HPC systems, which require massive parallel processing and low-latency communication. Traditional copper-based connections are unable to handle the bandwidth and energy demands of these workloads. Optical interconnects provide a reliable solution to interconnect GPUs, CPUs, and accelerators within large-scale systems. As AI adoption accelerates, demand for such high-performance interconnects will grow substantially, making them essential to system architecture.

• Integration into Telecom and 5G Infrastructure:
  With the rollout of 5G and the increasing bandwidth requirements of modern telecom networks, optical interconnects are gaining traction beyond data centers. They enable high-speed, low-latency connections between core and edge networks, ensuring seamless communication. This integration supports the growing demand for IoT, edge processing, and real-time applications. As telecom operators upgrade their infrastructure, optical interconnects are becoming an indispensable enabler of next-generation connectivity.

Market Growth Drivers

• Surge in Data Center Expansion and Cloud Computing:
  The proliferation of hyperscale data centers and cloud platforms is a primary driver of optical interconnect demand. These facilities require massive bandwidth to interconnect servers and switches efficiently. Optical links provide the necessary scalability, low latency, and power efficiency. The increasing reliance on SaaS, streaming, and enterprise cloud applications is accelerating the deployment of optical interconnects at scale, ensuring high-performance connectivity.

• Rising Demand for AI, Machine Learning, and Big Data Analytics:
  AI and big data workloads generate vast amounts of information that must be processed in real time, requiring high-throughput interconnects. Optical technologies address the limitations of copper interconnects by supporting ultra-fast communication with minimal signal loss. This capability is crucial for connecting accelerators and enabling distributed computing. As enterprises integrate AI and analytics into operations, the reliance on optical interconnects is expected to intensify significantly.

• Advancements in Silicon Photonics and Integrated Photonic Circuits:
  Breakthroughs in silicon photonics and integrated photonics are making optical interconnects more cost-effective and scalable. These advancements allow for compact, energy-efficient designs suitable for mass deployment. The ability to integrate optics directly with electronic chips reduces complexity and improves overall system performance. Continued innovation in this area will drive adoption across mainstream computing and communication industries, enhancing global market growth.

• Support from Telecom and 5G Network Evolution:
  The rollout of 5G networks and the need for faster backhaul and fronthaul connectivity are boosting demand for optical interconnects. Telecom operators are adopting optical solutions to manage the surge in data traffic from IoT, AR/VR, and edge computing applications. Optical interconnects ensure robust, low-latency performance critical for modern network infrastructures. This synergy between telecom evolution and optical technologies is a major factor sustaining market expansion.

Challenges in the Market

• High Initial Capital Expenditure and Integration Costs:
  The deployment of optical interconnects requires significant upfront investment in both equipment and infrastructure. This can be a barrier for small and mid-sized enterprises, which may struggle to justify the cost. Additionally, integrating optical components with existing systems involves technical challenges that require skilled expertise. The balance between investment and long-term ROI remains a key challenge, slowing adoption in cost-sensitive markets.

• Complexity in Manufacturing and Standardization:
  Optical interconnect technologies involve advanced fabrication processes that demand high precision and consistency. The lack of universal standards across vendors further complicates adoption, leading to interoperability issues. Establishing global standards for design, performance, and testing is critical to accelerating mainstream use. Until then, manufacturers and customers face challenges in achieving seamless integration and ensuring long-term reliability of deployments.

• Power and Thermal Management Challenges in Dense Systems:
  While optical interconnects reduce power consumption compared to copper, thermal management becomes critical in densely packed systems. High-performance environments such as data centers and HPC clusters require advanced cooling solutions to maintain efficiency. This adds complexity to system design and operational costs. Overcoming these thermal challenges is essential for sustaining scalability in high-density deployments.

• Skilled Workforce and Knowledge Gaps:
  The successful implementation of optical interconnects requires expertise in photonics, semiconductor integration, and network engineering. However, the talent pool with such specialized knowledge remains limited. Organizations face difficulties in recruiting and training professionals with the necessary skills. This knowledge gap can slow down deployment timelines and increase reliance on vendor-specific expertise, creating barriers to widespread adoption.

Optical Interconnects Market Segmentation

By Product Type

• Board-to-Board

• Rack-to-Rack

• Chip-to-Chip

• Module-to-Module

• Fiber Optic Cables

By Data Rate

• Less than 10 Gbps

• 10–40 Gbps

• 41–100 Gbps

• More than 100 Gbps

By Application

• Data Centers

• High-Performance Computing (HPC)

• Telecom & Networking

• Consumer Electronics

• Automotive & Industrial

By End-User Industry

• Cloud Service Providers

• Telecom Operators

• Enterprises

• Government & Defense

• Research Institutes

By Region

• North America

• Europe

• Asia-Pacific

• Rest of the World (ROW)

Leading Key Players

• Intel Corporation

• Cisco Systems, Inc.

• Broadcom Inc.

• NVIDIA Corporation

• Infinera Corporation

• Ciena Corporation

• Fujitsu Limited

• Juniper Networks, Inc.

• Lumentum Holdings Inc.

• Mellanox Technologies (NVIDIA Networking)

Recent Developments

• Intel Corporation expanded its silicon photonics portfolio with next-generation transceivers designed for hyperscale data centers.

• Cisco Systems announced advancements in co-packaged optics for high-density switches to support AI workloads.

• Broadcom introduced new optical interconnect solutions tailored for 800G and beyond data center applications.

• NVIDIA integrated optical connectivity into its HPC and AI platforms to address bandwidth bottlenecks.

• Infinera launched ultra-low-loss optical engines for long-haul and metro network interconnects.

This Market Report will Answer the Following Questions

• How many Optical Interconnects are manufactured per annum globally? Who are the sub-component suppliers in different regions?

• Cost Breakdown of a Global Optical Interconnect and Key Vendor Selection Criteria

• Where is the Optical Interconnect manufactured? What is the average margin per unit?

• Market share of Global Optical Interconnect market manufacturers and their upcoming products

• Cost advantage for OEMs who manufacture Global Optical Interconnect in-house

• Key predictions for next 5 years in the Global Optical Interconnect market

• Average B2B Optical Interconnect market price in all segments

• Latest trends in the Optical Interconnect market, by every market segment

• The market size (both volume and value) of the Optical Interconnect market in 2025–2031 and every year in between

• Production breakup of the Optical Interconnect market, by suppliers and their OEM relationship