Hyperscaler demands drive up demand for optical modules in Q1 2024

June 17, 2024
A new Cignal AI report revealed that 400 and 800GbE module shipments rose over 25% quarter over quarter.

As hyperscalers ramp up build outs, the appetite for bandwidth continues to rise. 

According to Cignal AI’s 1Q24 Optical Components Report, hyperscale network operator demand drove purchases of 400GbE and 800GbE datacom and 400ZR telecom optical modules to the research firm's “record levels.”

Over 3 million high-speed datacom modules were shipped this quarter to support AI cluster interconnect and traditional computing applications.

Ripe 800 GbE demand

Driven by AI applications, spending on datacom optical components rose over 90% as 400GbE and 800GbE optical modules for AI applications drove demand to record levels.

Cignal AI noted that combined unit shipments of 400GbE and 800GbE Datacom modules across all SR/DR/FR/LR specifications increased by 25% every quarter. Innolight led datacom module shipments.

“800GbE vendor shipments have yet to match demand, though nearly as many 800GbE modules shipped in 1Q24 as in 2023,” said Scott Wilkinson, lead analyst at Cignal AI. “While some vendors have reported that lead times are coming down, the demand for 400GbE and 800GbE modules remains exceptionally strong, and we anticipate that datacom segment revenue will double in 2024.”

Telecom struggles continue

As seen earlier, the telecom industry continued to see challenges in the first quarter.

The research firm said the telecom optical module shipment growth was concentrated in 400G coherent pluggables, up more than 35% yearly. Marvell and Acacia also experienced strong shipment growth.

Besides pluggable coherent, shipments of telecom components dipped year-over-year, with segment revenue dropping -26% year-over-year.

The coherent module market size declined to under $5 billion in 2023 but will grow in 2024 and is expected to reach $10 billion in 2028.

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About the Author

Sean Buckley

Sean is responsible for establishing and executing the editorial strategies of Lightwave and Broadband Technology Report across their websites, email newsletters, events, and other information products.

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