Coherent optical transceivers set to grow at 17% CAGR

Driven by module/embedded and plug, the coherent optics market is predicted to reach nearly $13 billion by 2027, according to a new analysis from Dell’Oro Group.

Specifically, pluggable transceivers are projected to grow at the highest rate and contribute most of the volume growth for the next five years.

“The demand for coherent technology is expanding,” stated Jimmy Yu, VP for optical transport market research at Dell’Oro Group. “This is partly due to the continuous need for better, lower powered, higher capacity transceivers that meet future global network requirements,” added Yu.

Using coherent transceivers on DWDM Systems will continue contributing to the largest market revenue share. However, using coherent optics on router and switch platforms will reach material levels within a short period.

Dell’Oro said that the coherent optics market is undergoing a “tectonic shift” with the availability of small form factor pluggable optics that will increase the use of coherent technology in routers and ethernet switches.

Coherent optics deployed on router and switch platforms will account for more than 50 percent of the annual increase in transceiver shipments throughout the forecast period. This will be due to the availability of ZR Optics, beginning with 400ZR and carrying through to 1600ZR. “Historically, most coherent optics have predominantly found their application in DWDM systems,” said Sameh Boujelbene, VP for Ethernet Switch market research at Dell’Oro Group. “However, with vendors making strides in developing smaller and more energy-efficient coherent transceivers, the scope of their use is rapidly expanding.”

He added the “expansion encompasses not only the range of platforms they can support but also the diversity of applications to which they can cater.”

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