5G Ignites Optical Communication Industry

The rising trends of 5G mobile communication, data centers, and remote offices have driven a substantial demand for network bandwidth, prompting governments, telecommunications companies, and Internet content providers (ICPs) in various countries to accelerate the development of higher-bandwidth optical communication network services. These services are not only expanding for enterprise fiber networks but also spreading to applications in 5G mobile communication, large-scale data center cloud networks, and other domains. In recent years, due to the massive network demand from ICPs and their influence over product research and development, they have been able to lead new product innovations and facilitate standardization and multi-source agreements. Omdia expects that data center network optical modules will shift towards 400G in the next three years.

On the other hand, 5G utilizes higher frequency spectrums, and the use of small base stations to supplement signal gaps has become established. This trend further increases the demand for ground fiber networks while also restructuring the architecture of mobile networks, promoting the development of Open Radio Access Network (O-RAN) architecture, and bringing new original design manufacturer (ODM) optical communication opportunities. Meanwhile, amid international factors such as the US-China trade war and the COVID-19 pandemic, the global optical communication industry's market landscape is expected to undergo a reshuffling. If Taiwanese manufacturers can seize the opportunity and implement effective countermeasures, they may usher in another wave of growth.