Optical DWDM Equipment Market to Reach $18 bn Driven by Coherent DSPs

The Optical Dense Wavelength Division Multiplexing (DWDM) equipment market is poised to achieve significant growth, with market revenue forecasted to reach $18 billion by 2028, Dell’Oro Group said.
Optical fiber investmentThis surge in DWDM equipment market is anticipated to be fueled by the entry of the new generation of coherent Digital Signal Processors (DSPs), capable of delivering impressive wavelength speeds exceeding one terabit-per-second. The forecast indicates robust market expansion for the next five years.

Jimmy Yu, Vice President at Dell’Oro Group, said: “We are projecting the new generation of coherent DSPs that are capable of terabit speeds will grow at an accelerated pace over the next five years.”

By 2028, over half of the DWDM market revenue will be generated from shipments of 1.2 Tbps and 1.6 Tbps-capable line cards. These advanced line cards are expected to introduce 400 Gbps wavelengths into ultra-long-haul applications covering thousands of kilometers, with 800 Gbps wavelengths becoming prevalent in other network segments.

Some of the major players in the DWDM system market include: ADVA Optical Networking, Cisco Systems, Ciena Corporatio, Fujitsu, ZTE Corporation, Huawei Technologies and Infinera Corporation.

Key highlights from the Optical Transport 5-Year January 2024 Forecast Report include:

DWDM Long Haul Equipment Demand Surpassing Metro Equipment: The report projects that demand for DWDM Long Haul equipment will outpace Metro equipment, contributing a higher share of market revenue in the coming years.

Rapid Growth in Coherent Wavelength Shipments: The shipment of coherent wavelengths, capable of terabit-per-second speeds, is forecasted to experience a remarkable 200 percent Compound Annual Growth Rate (CAGR) over the next five years.

Baud Rates Over 100 GHz on the Rise: By 2028, baud rates exceeding 100 GHz are expected to constitute over 40 percent of new installations. While high baud rates reduce the total number of wavelengths per fiber, they offer enhanced performance, longer reach, and cost reduction.

The forecast underscores the industry’s focus on advancing optical communication technologies, with coherent DSPs at the forefront, driving innovations that promise higher speeds, efficiency, and cost-effectiveness in optical DWDM networks.