REDWOOD CITY, Calif.--The demand for optical Transport equipment is expected to increase to $18 billion by 2026. All of the market growth will be from sales of DWDM system that deliver wavelength speeds in excess of 200 Gbps. However, IPoDWDM is expected to lower the overall demand for DWDM systems.
Optical Transport market is forecast to grow at a 3 percent compounded annual growth rate (CAGR), driven by higher demand in all major regions. Coherent wavelength shipments on DWDM systems are forecast to grow at a 12 percent CAGR. The ZR optics market comprised of 400ZR and 800ZR is forecast to surpass $600 million by 2026.
"I am excited to see how the Optical Transport market unfolds in the next few years," said Jimmy Yu, VP at Dell'Oro Group. "We are predicting that demand will continue to increase for the next five years, and that the market will reach $18 billion by 2026. Drivers of our growth prediction include the growing global economy, government initiatives to fund the reach of broadband to rural areas, and overall network upgrades to align with customer demand for more bandwidth. There will, however, be some bumps in the road."
Yu said 400ZR and 1.2-capable wavelengths could have a potential impact on the optical market
"It will be interesting to watch how new technologies such as 400ZR and 1.2 Tbps-capable wavelengths change the market dynamics. Will 400ZR really drive the adoption of IPoDWDM, an architectural concept that originally came out over a decade ago? If it does, will it change the demand profile for new generations of coherent technology such as 1.2 Tbps-capable modules scheduled to be released in a year? For the first question, I think it will. For the second question, I think it might," said Yu.
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