800G Ethernet transceivers become most popular module in mega data centers by 2025: LightCounting

July 22, 2021
Three factors will drive greater demand for such high-speed modules than previously anticipated, according to LightCounting.

Optical transceivers that enable 800G Ethernet transmission are just starting to reach the market (see, for example, “InnoLight leverages Spirent to demo 800G Ethernet interoperability” and “OFC 2021 Video Show Report”). But LightCounting expects their popularity among the five largest cloud and hyperscale data center operators -- Alibaba, Amazon, Facebook, Google, and Microsoft – to ramp quickly. Those five companies will spend more than $1.8 billion on 800G Ethernet modules in 2026, the market research firm predicts in its latest Mega Data Center Optics report.

Overall, the Big 5 will spend more than $3 billion on Ethernet transceivers in 2026, up from $1.4 billion in 2020 (see chart above). And that doesn’t include the 1.6-Tbps modules LightCounting expects Google to start deploying toward the end of the forecast period.

Three factors will drive greater demand for such high-speed modules than previously anticipated, according to LightCounting:

  1. Continued strong data traffic growth, driven by artificial intelligence (AI) applications, as Google indicated in data it shared at OFC 2021.
  2. Rapid development of 800G Ethernet transceivers and the necessary supporting components.
  3. Higher than expected demand for bandwidth in data center clusters that will rely on DWDM optics.

The market will see the introduction of 800ZR coherent modules in the 2023/2024 timeframe, according to the market research firm. Meanwhile, co-packaged optics will begin to see deployments in cloud data centers beginning in 2024, LightCounting believes.

The Mega Data Center Optics report provides analysis of the impact of “Mega Datacenters” on the market for Ethernet optical transceivers, DWDM optics, active optical cables (AOCs), embedded optical modules (EOMs), and co-packaged optics (CPO) and provides projections for the market in 2021-2026. The report offers forecasts for more than 50 product categories, including 10GbE, 40GbE, 100GbE, 200GbE, 2x200GbE, 400GbE, and 2x400GbE transceivers, sorted by reach, form factors, and segmented into three main applications: telecom, enterprise, and cloud. It also provides historical shipments data and projections for 2.5G, 10G, 100G, 200G, 400G, and 600/800G DWDM ports, several types of AOCs/EOMs, and CPO.

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