VCSEL for Data Communication Market to Grow at a CAGR of 19.7% to reach US$ 1,135.68 Mn from 2019 to 2027

VCSEL for Data Communication Market Forecast to 2027 - COVID-19 Impact and Global Analysis by Type (Single Mode, Multi-Mode); Material (Gallium Nitride, Gallium Arsenide, Indium Phosphide, Other)

Publication Month : Aug 2020

  • Report Code : TIPRE00013517
  • Category : Electronics and Semiconductor
  • Status : Published
  • No. of Pages : 129
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The VCSEL for data communication market was valued at US$ 284.05 million in 2017 and is projected to reach US$ 1,135.68 million by 2027; it is expected to grow at a CAGR of 19.7% during 2020–2027.

Globally, the market comprises numerous market players specializing in broad range of business offerings pertaining to the VCSEL related solutions for data communication. However, the strong presence of electronics manufacturing and their subsequent components as well as parts in the Asian region has contributed significantly in the region’s leading VCSEL for Data Communication market share in the overall global market. Furthermore, the region is expected to continue to maintain its market leadership through the coming period.

Geographically, the global market was dominated by the Asia-Pacific region owing to notable presence several market players operating in the market along with regional presence of numerous other globally present market players. In addition to this, the substantial availability of manufacturing facilities for the end-user industries such as consumer electronics, industrial, data center & fiber optics related products across the Asian especially the Chinese region has facilitated in the notable market share of the region in the overall global market.

Also, certain countries in the rest of world region and emerging economies have started rolling-out the 5G, though, presently, the coverage is very limited. Operators aggressively intensifying their 5G coverage, predominantly in the Middle East region that has been on the lead of launching 5G services in 2019. The roll-out of 5G services and expansion of 5G network is expected to boost the demand for VCSELs. Moreover, the region is experiencing growth in its data center market. For instance, in 2019, Microsoft opened two data centers in Middle East region, based in Abu Dhabi and Dubai. Also, AWS opened new region in Bahrain. Such developments propel the market for VCSEL in Middle East.

IMPACT OF COVID-19 ON VCSEL FOR DATA COMMUNICATION

Though the complete impact of COVID-19 is still unidentified, the impact across the electronics value chain will probably be far-reaching—and strongly affecting parties involved with semiconductor industry. COVID-19 is underlining the possible risks and vulnerability of present electronics and semiconductor value chain model as well as challenging the semiconductor industry to consider altering its global supply chain model. Furthermore, during lockdown in several affected countries, VCSEL manufacturers halted their activities owing to disrupted supply of raw materials such as GaAs and InP with restrictions on mobility during the lockdown. However, after the relaxation, the market is expected to witness growth as investments are expected in the data communications industry. Also, several governments have urged people to work from home as well as practice social distancing. Since then, several day-to-day activities from working to schooling have shifted online. This shift has resulted in a surge in digital communications services across the world. Online teaching, as well as work from home, has increased the need for internet access with people ensuring to remain connected.

Lucrative Regions for VCSEL for Data Communication Market

Lucrative Regions for VCSEL for Data Communication Market
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Market Insights–VCSEL for Data Communication Market

Expanding Scope of Application through Continuous Technological Improvement

The VCSEL-based products continue to attract notable investments from several international market players and visionaries to leverage the commercial scope for this technology across different industry verticals. As a result, there have been significant investments in the establishment of state-of-the-art production and manufacturing facilities for these products in developed as well as developing countries. For instance, in 2019, the European Commission invested € 25.0 million to set-up a new VCSEL-based manufacturing plant in Berlin, Germany, which is capable of mass production of the semiconductor chips including testing, equipment focused on datacom and sensing based applications. Similarly, Huawei, a global telecom giant, invested in Vertilite, a Chinese start-up, specialized in the development of a broad range of VCSEL products for numerous applications, including data communication. Therefore, continuous investments in research and development to identify the potentially new commercial applications of VCSEL-based products, including data communication applications, fuel the growth of the market.

Type Insights- VCSEL for Data Communication Market

Based on type, the VCSEL for data communication market is segmented into single mode and multi-mode. The multi-mode segment is anticipated to dominate the VCSEL market during the forecast period. These VCSELs are widely used for high data rate transmission over short distance. Further, these are used for high power 3D ToF (time of flight camera) sensing, industrial, and LiDAR applications. The rising number of technologies and companies, including Apple, Google, and Microsoft, are investing considerably in the expansion of their data centers worldwide, which, in turn is expected to propel the demand for multimode VCSELs during the forecast period.

Material Segment Insights

Based on material, the VCSEL for the data communication market is segmented into Gallium Nitride (GaN), Gallium Arsenide (GaAs), Indium Phosphide (InP), and Others. The GaAs segment led the market in 2019. The rising demand for Gallium Arsenide is attributed to its increased usage in data communication owing to its most vital benefit, i.e., speed. Electrons travel nearly five times faster in gallium arsenide compared to silicon. Also, GaAs offers high resistance to electrical current before it is doped with any impurities. InP is one of the most developed platform for photonic integrated circuits. The advancement in InP applications, as well as demand for high performance VCSEL technology, are projected to generate potential growth opportunities for the VCSEL for the data communication market.

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VCSEL for Data Communication Market: Strategic Insights

vcsel-for-data-communication-market
Market Size Value inUS$ 284.05 Million in 2017
Market Size Value byUS$ 1,135.68 Million by 2027
Growth rateCAGR of 19.7% from 2020-2027
Forecast Period2020-2027
Base Year2020
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The market players focus on new product innovations and developments by integrating advanced technologies and features in their products to compete with the competitors.

  • In 2019,TRUMPF completed the acquisition of Photonics GmbH from Philips. On the same date, the company set up a new business named TRUMPF Photonic Components. Through this acquisition, TRUMPF aims to gain access to the VCSEL diodesegment, which is further anticipated to complement the company’s existing high-power diode laser business.
  • In 2019, II-VI Incorporated launched its 56 Gb/s PAM4 VCSEL arrays for 400-gigabit Ethernet (GbE) short-reach transceivers and active optical cables (AOCs) for datacenter deployment. The availability of Ethernet equipment with greater than 12 Tb/s of switching capacity facilitates hyperscale datacenters to accelerate the migration from the transmission speed of 100 GbE to 400 GbE.

VCSEL for Data Communication Market – by Type

  • Single Mode
  • Multi-Mode

VCSEL for Data Communication Market– by End-user

  • Gallium Nitride
  • Gallium Arsenide
  • Indium Phosphide
  • Others


VCSEL for Data Communication Market - By Geography

  • North America
    • U.S.
      • Illinois
      • Ohio
      • Michigan
      • Indiana
    • Canada
    • Mexico
  • Europe
    • France
    • Germany
    • Italy
    • Russia
    • UK
    • Rest of Europe
  • Asia Pacific (APAC)
    • South Korea
    • Australia
    • China
    • Taiwan
    • Japan
    • Rest of Asia-Pacific
  • Middle East & Africa (MEA)
    • South Africa
    • Saudi Arabia
    • UAE
    • Rest of MEA
  • South America (SAM)
    • Brazil
    • Rest of MEA


Company Profiles

  • Bandwidth10
  • Broadcom, Inc.
  • Hamamatsu Photonics K.K.
  • II-VI Incorporated
  • Lumentum Holdings Inc.
  • TRUMPF
  • Ushio America, Inc.
  • VERTILAS GmbH
  • Vertilite Co., Ltd.
  • VI Systems GmbH
Report Coverage
Report Coverage

Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends

Segment Covered
Segment Covered

Type ; Material

Regional Scope
Regional Scope

North America, Europe, Asia Pacific, Middle East & Africa, South & Central America

Country Scope
Country Scope

Australia, Canada, China, France, Germany, India, Italy, Japan, MEA, Mexico, Russian Federation, SAM, United Kingdom, United States

Frequently Asked Questions


Which region led the VCSEL for data communication market in 2019?

Geographically, the global market was dominated by the Asia-Pacific region owing to notable presence several market players operating in the market along with regional presence of numerous other globally present market players. In addition to this, the substantial availability of manufacturing facilities for the end-user industries such as consumer electronics, industrial, data center & fiber optics related products across the Asian especially the Chinese region has facilitated in the notable market share of the region in the overall global market

Which factor is driving the VCSEL for data communication market?

The VCSEL technology has gained unprecedented attention from several international manufacturers and end users. One of the leading smartphone manufacturers, Apple integrated VCSEL-enabled products in smartphones to facilitate biometric sensing and data collection. As a result, over the years, the technology has gained major traction across numerous industrial as well as commercial applications.

Which material led the VCSEL for data communication market?

GaAs materials have properties that are conducive to lasing. Further, these materials can be utilized to fabricate high-reflectivity mirrors. Thereby, it is possible to get highly reflective DBRs using arsenide semiconductors through epitaxial growth techniques. One of the standard approaches of fabricating GaAs-based VCSELs is to utilize AlGaAs materials with two different compositions.

The List of Companies - VCSEL for Data Communication Market

  1. Bandwidth10
  2. Broadcom, Inc.
  3. Hamamatsu Photonics K.K.
  4. II-VI Incorporated
  5. Lumentum Holdings Inc.
  6. TRUMPF
  7. Ushio America, Inc.
  8. VERTILAS GmbH
  9. Vertilite Co., Ltd.
  10. VI Systems GmbH

The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.

  1. Data Collection and Secondary Research:

As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.

Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.

  1. Primary Research:

The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.

For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.

A typical research interview fulfils the following functions:

  • Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
  • Validates and strengthens in-house secondary research findings
  • Develops the analysis team’s expertise and market understanding

Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:

  • Industry participants: VPs, business development managers, market intelligence managers and national sales managers
  • Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.

Below is the breakup of our primary respondents by company, designation, and region:

Research Methodology

Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.

  1. Data Analysis:

Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.

  • 3.1 Macro-Economic Factor Analysis:

We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.

  • 3.2 Country Level Data:

Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.

  • 3.3 Company Profile:

The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.

  • 3.4 Developing Base Number:

Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.

  1. Data Triangulation and Final Review:

The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.

We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.

We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.

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