Optical Transport Market to Expand for many more Years, Reaching nearly $18 Billion, According to Dell’Oro Group

The world experienced a global pandemic in 2020 that ushered in a global economic recession. It is still unknown how much longer the coronavirus, COVID-19, will spread and cause economic disruptions, and at what rate the global economy will recover following massive shutdowns in the first half of the year. That being said, while in past macro-economic recessions the Optical Transport market would contract, we believe that in this recession, the demand for Optical Transport will increase as a large number of people shift to remote learning and working.

 We believe the fundamental driver for the optical market—bandwidth—persists and that its value has been amplified by the recent pandemic. As a result, we forecast the Optical Transport market, largely comprised of DWDM systems, to expand in 2020 and for the next five years, reaching nearly $18 billion. However, there are near term challenges related to supply, distribution, and installation.

Shift to 800 Gbps-Capable Line Cards will be Rapid in DWDM

The first 800 Gbps-capable line cards started to ship in early 2020. We expect volumes to ramp during this year, as additional vendors introduce their products. We forecast that by 2024, nearly 30 percent of wavelength shipments will be from an 800 Gbps-capable line card. More than half of these line cards are expected to be used at 400 Gbps.

We predict the next wavelength speed following 800 Gbps will be 1200 Gbps (1.2 Tbps). Based on the timing of past coherent DSP introductions and first-line card shipments, we anticipate 1.2 Tbps-capable line cards to enter the market in the 2023-2024 time period (but more likely in 2024).

Other Market Trends

• Demand for Optical Transport gear for data center interconnect (DCI) is expected to take a turn in the near future.
• Disaggregated WDM transponder unit sales are a bright spot of growth, annually growing at a double-digit percentage rate.
• 400ZR will moderate the market’s growth.

The Dell’Oro Group Optical Transport 5-Year Forecast Report offers a complete overview of the Optical Transport industry with tables covering manufacturers’ revenue, average selling prices, unit shipments, wavelength shipments (by speed up to 1.2 Tbps). The report tracks DWDM long haul, WDM metro, multiservice multiplexers (SONET/SDH), optical switch, optical packet platforms, data center interconnect (metro and long haul), and disaggregated WDM. Click here to learn more about the report or contact us at dgsales@delloro.com&cc=daisy@delloro.com.