Due to customers pausing purchases as they digest excess inventory, the Optical Transport market is forecasted to grow 2 percent on average for the next five years due to a decline in 2024, according to a new report from Dell’Oro Group.
“2024 is turning out to be a tough year for the Optical Transport equipment market because of inventory digestion,” said Jimmy Yu, Vice President at Dell’Oro Group. “But looking past this year, when the market gets through this inventory cycle, inflation moderates, and economies strengthen, we see good amounts of growth for the Optical Transport equipment market. We track four customer groups—communication service providers, cable companies, internet content providers, and others—and project all four to grow after 2024, especially content providers, to reach new revenue highs by 2028,” added Yu.
Additional highlights from the Optical Transport 5-Year July 2024 Forecast Report:
- Demand for data center interconnect (DCI) is forecast to increase each year for the next five years with nearly all of the growth from long haul deployments. Metro demand will be lower due to the increased use of routers and Ethernet switches for coherent transport (IPoDWDM).
- Internet content providers (ICP) are predicted to purchase nearly 50 percent more WDM systems directly from systems manufacturers in the next five years.
- DWDM channel widths are projected to steadily increase from the standard 50 GHz.
- By 2028, more than 80 percent of wavelength shipments will need a channel width greater than 50 GHz.