The Global AOC, DAC, and AEC Market Value Will Reach $2.8 Billion by 2028

Light Counting(LC) publishes high-speed cable, LPO, and CPO reports. The high-speed cable market is forecast to more than double in the next five years and reach $2.8 billion by 2028.  Active Electrical Cable (AEC) will gradually seize the market share of Active Optical Cables (AOC) and Direct Attach Copper (DAC) cables. AEC offers longer coverage and is much thinner than DAC.

LC also upgraded its DAC forecasts, with the new 100G SerDes enabling greater than expected coverage for passive copper cables based on 100G per channel designs, including 400G, 800G, and 1.6T Dacs. LC expects that the 200G SerDes may also surprise us with excellent performance, as they will start shipping in late 2024. This will expand DAC to 200G per channel design, securing its market position for the next decade.

Because DAC does not consume power, it is the default solution for data center connections dedicated to improving energy efficiency. Minimizing power consumption is the most critical for AI clusters. Nvidia's strategy is to deploy as many Dacs as possible, using optical devices only when absolutely necessary.

Since the latest edition of the market forecast report released in October 2023, LC's forecast for AOC has not changed, and AOC's sales are expected to grow at a compound average growth rate (CAGR) of 15% in 2024-2028, but DAC and AEC's sales will grow at a compound average growth rate (CAGR) of 25% and 45% respectively. As a result, AOC's market share will decline by 2028.

Nvidia is the main consumer of 200G AOC, but for 400G and higher speeds, the company plans to use pluggable optical transceivers instead of AOC. Large AI clusters will rely heavily on optical transceivers, but smaller systems will primarily use cables. While the largest clusters will get all the headlines, there will also be a large number of smaller systems installed.