SerDes Market - Size, Share, Industry Trends, and Forecasts (2023 - 2031)

SerDes Market Dynamics - (DRO) :

Key Drivers :

Rising utilization of SerDes in IT and Telecommunication industry is driving the market growth

SerDes is primarily used in the IT & telecommunication industry, particularly for applications including in optical fiber communication system, data centers, and 5G infrastructure among others. Moreover, SerDes is utilized in telecom transmission equipment including pseudo-optical switches and add-drop multiplexers for aggregating SONET/SDH streams for data transmission over cable or fiber to the core network.

Factors including the growing penetration of 5G infrastructure, rising expansion of data centers, and increasing adoption of smartphones and communication devices are among the primary aspects fostering the growth of the IT & telecommunication sector.

For instance, according to the Ookla 5G Map, the overall 5G network deployment reached up to 112 countries in November 2021, depicting an incline of 13% in contrast to 99 countries in November 2020. Furthermore, according to Ookla, the amount of 5G deployments increased significantly and reached up to 85,602 deployments in 2021 as opposed to 17,428 deployments in 2020.

Thus, the growing telecommunication industry is increasing the application of SerDes in telecom base stations and optical fiber communication system for providing high-speed data transmission, in turn driving the growth of the market.

Growing automotive sector is spurring the market growth

SerDes is used in the automotive sector for applications including automobile infotainment system and ADAS (advanced driver assistance system) among others. SerDes is among the primary connections used for automotive high-resolution, in-vehicle displays including infotainment display or back-up cameras. SerDes offers a point-to-point architecture with low baud rates, high bandwidth, and high orders of modulation, which are key determinants for increasing its utilization in automotive sector.

Factors including advancement in autonomous driving, rise in automobile production, and growing investments in automotive manufacturing facilities are among the primary determinants driving the growth of the automotive sector.

For instance, according to the International Organization of Motor Vehicle Manufacturers, the global passenger car production reached 61.59 million in 2022, witnessing an incline of approximately 8% in contrast to 57.05 million in 2021. Additionally, according to the European Automobile Manufacturers Association, passenger car production in the Europe Union reached up to 10.9 million in 2022, representing a growth of 8.3% as compared to 2021.

Hence, the rise in automobile production is driving the adoption of SerDes for application in automobile ADAS and infotainment system, in turn proliferating the growth of the market.

Key Restraints :

Limitations and operational challenges associated with SerDes are restraining the market growth

The implementation of SerDes is associated with certain limitations and operational challenges, which is a prime factor limiting market growth.

For instance, SerDes are usually associated with complexities and difficulties in designing and circuitry. SerDes often require a good RX CDR, TX driver, TX PLL, and RX front end for low data rates and efficient performance. The aforementioned components are complex analog subsystems that require a skilled team of analog/mixed-signal designers for design and development.

Additionally, SerDes manufacturing is usually associated with high cost, among which the primary expense of SerDes stems from design and verification. Further, the verification process can be quite complex at the system level, particularly for standards such as PCIe. Therefore, the above-mentioned limitations and operational challenges associated with SerDes are constraining the growth of the market.

Future Opportunities :

Rising investments in data centers is expected to promote potential opportunities for market growth

The rising investments in data centers is expected to present potential opportunities for the growth of the SerDes market. SerDes is often used in data centers for facilitating high bandwidth information exchange between cloud servers and data centers. Moreover, SerDes offers high-speed data transmission in data centers by enabling efficient and steady data flow. The above benefits of SerDes are further increasing its adoption in data centers.

Factors including the growing pace of digitalization, increasing deployment of cloud services, and rising investments in development of data centers are expected to facilitate lucrative growth aspects for the market.

For instance, in October 2022, IONOS Group SE, in collaboration with Fasthosts, launched a new data center with an initial investment of approximately USD 24.4 million in Worcester Six Business Park located in the United Kingdom. Additionally, in November 2021, Tencent Cloud launched its new data center in Brazil in order to fulfill the rising demand for digitalization in Latin America. The launch of the new data center provides highly reliable and stable cloud services to facilitate the growth of Brazilian and other Latin America-based businesses.

Hence, the rising investments in development of data centers is projected to drive the adoption of SerDes in data centers for high-speed data transmission, in turn stimulating opportunities for market growth during the forecast period.