Optical transport equipment market to remain on growth track through 2027: Dell’Oro

Jan. 24, 2023
Not surprisingly, different facets of the optical transport systems set will expand at different rates.

Revenues from the optical transport equipment market should remain on an upward trajectory through 2027, according to Dell’Oro Group. The market research firm predicts within its newly released Optical Transport 5-Year Forecast Report that the space should see a 3% compounded annual growth rate (CAGR) through 2027, when sales are expected to reach $17 billion. Cumulative revenue during that five-year period should hit $81 billion, Dell’Oro believes.

“We expect annual growth rates to fluctuate in the near term before stabilizing to a more typical 3% growth rate,” said Jimmy Yu, vice president at Dell’Oro Group. “There is still a large amount of market uncertainty this year due to the economic backdrop—economists are predicting a high chance of a recession in North America and Europe. However, at the same time, most optical systems equipment manufacturers are reporting record levels of order backlog entering the year, and we expect that most of this backlog could convert to revenue when component supply improves this year.”

For this reason, Yu told Lightwave that the optical transport market should begin the forecast period on schedule with a 3% growth rate in 2023.

Not surprisingly, different facets of the optical transport systems set will expand at different rates. For example, the WDM metro market should see lower growth than historical averages due to the growing use of IP-over-DWDM. The DWDM long-haul market should increase at a five-year CAGR of 5%, while coherent wavelength shipments on WDM systems should climb at an 11% CAGR, reaching 1.2 million annual shipments by 2027. Meanwhile, 400-Gbps wavelengths installments are expected to dominate for most of the forecast period.

Dell’Oro’s Optical Transport 5-Year Forecast Report provides 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, and ZR optics.

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