Optical transport hardware sales to hit $18 billion by 2026, despite 400ZR: Dell’Oro

Jan. 20, 2022
Sales of DWDM systems that support data rates greater than 200 Gbps will drive this growth at a CAGR of 3%, Dell’Oro states in the report.

Dell’Oro Group asserts in its latest Optical Transport 5-Year Forecast Report that growing use of 400ZR and other coherent pluggables will take a bite out of DWDM sales over the next five years. Nevertheless, the market research firm predicts that sales of optical transport systems revenues will reach $18 billion by 2026.
Sales of DWDM systems that support data rates greater than 200 Gbps will drive this growth at a CAGR of 3%, Dell’Oro states in the report. Coherent wavelength shipments on DWDM systems will grow at a 12% CAGR.
“I am excited to see how the optical transport market unfolds in the next few years,” commented Jimmy Yu, vice president at Dell’Oro Group. “We are predicting that demand will continue to increase for the next five years, and that the market will reach $18 billion by 2026. Drivers of our growth prediction include the growing global economy, government initiatives to fund the reach of broadband to rural areas, and overall network upgrades to align with customer demand for more bandwidth. There will, however, be some bumps in the road.”
Those bumps will come in the shape of high-speed coherent plugggable transceivers for IP over DWDM (IPoDWDM) applications. Yu and Dell’Oro believe the ZR optics market, which comprises 400ZR and 800ZR, will exceed $600 million by 2026.
“It will be interesting to watch how new technologies such as 400ZR and 1.2 Tbps-capable wavelengths change the market dynamics. Will 400ZR really drive the adoption of IPoDWDM, an architectural concept that originally came out over a decade ago? If it does, will it change the demand profile for new generations of coherent technology such as 1.2 Tbps-capable modules scheduled to be released in a year? For the first question, I think it will. For the second question, I think it might,” Yu stated.
Dell’Oro’s Optical Transport 5-Year Forecast Report offers an overview of the optical transport industry with tables covering manufacturers’ revenue, average selling prices, unit shipments, and wavelength shipments (by speed up to 1.2+ Tbps). The report tracks DWDM long haul, WDM metro, multiservice multiplexers, optical switch, disaggregated WDM, data center interconnect (DCI), and ZR optics.
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About the Author

Stephen Hardy | Editorial Director and Associate Publisher, Lightwave

Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.

Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.

He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.

You can connect with Stephen on LinkedIn as well as Twitter.

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