Coherent Optical Transceiver Shipments Expected to Grow at 17% CAGR: Dell’Oro

There will be a significant surge in the shipment of coherent optical transceivers, Dell’Oro Group said.
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This projection, with a compound annual growth rate (CAGR) of 17 percent, is set to shape the industry landscape for the next five years. The report further highlights the transformative impact of small form factor pluggable optics on the Coherent Optics market, significantly boosting the adoption of coherent technology in routers and ethernet switches.

Jimmy Yu, Vice President for Optical Transport Market Research at Dell’Oro Group, emphasized the growing demand for coherent technology. He pointed out that the expansion of coherent technology is driven by the persistent need for enhanced, energy-efficient, and high-capacity transceivers to meet the evolving demands of global networks.

Traditionally, coherent optics have primarily been associated with DWDM (Dense Wavelength Division Multiplexing) systems. However, Sameh Boujelbene, Vice President for Ethernet Switch Market Research at Dell’Oro Group, revealed a notable shift. Vendors have been making strides in developing smaller and more energy-efficient coherent transceivers, expanding their application not only in terms of supported platforms but also diversifying the range of applications they can cater to.

Key Highlights from the Coherent Optics Report:

Market Growth: The Coherent Optics market is predicted to achieve a remarkable valuation of nearly $13 billion by 2027. This growth is expected to be driven by two primary form factors: Module/Embedded and Plug. Notably, pluggable transceivers are projected to experience the highest growth rate, making a significant contribution to overall volume growth over the next five years.

Dominance of DWDM Systems: While the use of coherent transceivers on DWDM systems continues to contribute significantly to market revenue, it is anticipated that the deployment of coherent optics on Router & Switch platforms will rise swiftly. These platforms will soon reach material levels of adoption, marking a substantial expansion in the industry’s scope.

Router & Switch Platform Adoption: Coherent optics deployed on Router & Switch platforms are poised to account for over 50 percent of the annual increase in transceiver shipments throughout the forecast period. This notable shift is attributed to the availability of ZR Optics, starting with 400ZR and extending to 1600ZR, facilitating greater versatility and efficiency in network infrastructure.

The forecast by Dell’Oro Group underscores the dynamic evolution and promising growth of the Coherent Optics market. As network requirements continue to advance, the industry is witnessing a surge in innovation, resulting in the wider application of coherent technology across various platforms and applications.