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Global internet data traffic in 2021 is estimated to be 127 times greater than in 2005. The internet, smartphones, social media, video streaming, the Internet of Things, artificial intelligence and self-driving cars are creating vast amounts of new data every day.

As data traffic increases, there will also be rapid growth in the hardware devices that process, store, and transmit data. We believe hyperscale data centres will lead the rising demand for key components, such as servers, switches, storage devices, and optical transceivers.

In 2016, some 73 per cent of global internet data traffic was generated by online video streaming but this is forecast to rise to 82 per cent in 2021 thanks to the popularity of live video streaming and video-on-demand (VoD). VoD traffic alone in 2021 could equal 7.2 billion DVDs a month.

Meanwhile, higher-resolution smartphone cameras are increasing data traffic. The file size of pictures taken on the latest smartphones are triple that of their predecessors and the file size of a 60-second video has increased from 120MB to 350MB.

Autonomous-driving – which could happen faster than expected – requires many key technologies including cameras, sensors, LiDar distance-measuring as well as decision-making software. One estimate suggests a driverless vehicle could generate 4TB of data each day – equivalent to about 800 Blu-ray movies, or 10 per cent of the films produced in a year.

If just 2 per cent of cars sold in 2020 are driverless, the data generated every day would equal the total global traffic in a data centre in the whole of 2016.

The Internet of Things constantly links users to devices, vehicles and home equipment to the internet, but it also connects the appliances to each other. The data generated may be less than for large files such as video streaming, but the frequency it is generated at is high and it needs to be stored, analysed, and transmitted.

One estimate says 25 billion devices will be connected to the internet by 2020, up from around 6 billion now. And the data generated by industrial IoT devices could grow from 4,000 exabytes (EB) in 2015 to 14,000EB by 2020 – double the amount of global data centre traffic in 2016.

Artificial intelligence will generate massive amounts of data too, requiring high-performance cloud computing.

The digital world will likely be increasingly powered by faster 5G telecom technology, but that requires more base stations and more fixed networks and we think only fibre can meet the increased bandwidth requirements. But rising data traffic and mobile 5G networks should drive a future upgrade cycle within telecom fixed networks.

The key optical component enabling photon-based connections are ‘transceivers’ that combine both transmitter and receiver in a single package. Compared with copper-based cables, they provide much faster transmission, generate less heat, and are more resilient to external interference and electric current noise.

To accommodate the rise in data traffic, store all the information, and process the data, we expect a sharp growth in the number and size of data centres. And given the growth in cloud computing, we believe there will be ever-increasing demand for higher bandwidth in data centre networks.

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