The coherent optical transceiver shipments will grow at a double-digit compounded annual growth rate (CAGR) for the next five years, surpassing well over five million in cumulative shipments, according to a new report from Dell’Oro Group. Additionally, vendors’ advancements in smaller, energy-efficient coherent transceivers are rapidly broadening their platform compatibility and application diversity. The firm currently projects that, over the next five years, nearly half of the coherent transceivers will ship on routers and Ethernet switches.
“The move to pluggable coherent transceivers is occurring at a rapid pace,” stated Jimmy Yu, Vice President for Optical Transport market research at Dell’Oro Group. “This movement accelerated with the wide availability of ZR/ZR+ optics and, more importantly, the adoption of an IPoDWDM architecture,” added Yu.
“Today’s largest AI clusters built by hyperscalers, are already approaching 100 thousand accelerators, with projections reaching up to one million in the near future,” stated Sameh Boujelbene, Vice President for Ethernet Switch market research at Dell’Oro Group. “Due to the limited power capacity in each data center—and the high-power consumption of these accelerators—AI clusters are increasingly distributed across multiple data centers. This shift heightens the importance of Data Center Interconnect technologies that connect these data centers efficiently,” added Boujelbene.
Additional highlights from the Coherent Optics Report:
- Dell’Oro significantly raised its optical transceiver shipment forecast to reflect faster than expected adoption of ZR pluggable optics and increased demand on hyperscalers backbone bandwidth propelled by large AI clusters.
- Dell’Oro raised its forecast for 1600ZR and lowered that of 800ZR, reflecting rising demand for higher data center speeds to support AI/ML compute clusters.
- Coherent optics deployed on Router & Switch platforms will account for more than 50 percent of the annual increase in transceiver shipments throughout the forecast period. By 2028, the firm expects them to constitute more than 45 percent of the total transceiver volume.
- Demand for ZR+ optics is on the rise with the introduction of higher transmit-powered transceivers. Dell’Oro forecasts that ZR+ optic shipments will grow at a five-year CAGR of 70 percent.
