x
Optical/IP Networks

DWDM equipment market to exceed $17 billion in five years – Dell'Oro reports

Demand for optical transport DWDM equipment is forecast to exceed $17 billion by 2026, according to Dell'Oro Group.

The $17 billion in revenue for dense wavelength-division multiplexing (DWDM) equipment represents the bulk of revenue for the total optical transport equipment market. Dell'Oro forecasts the total market to grow at a 3% compound annual growth rate (CAGR) to $18 billion by 2026 as a result of sales of DWDM systems delivering wavelength speeds over 200 Gbit/s. Researchers at Omdia are also bullish about growth in the optical network market, which they project will exceed $20 billion by 2027.

Dell'Oro predicts that DWDM long-haul revenue will grow at a five-year CAGR of 5%. Over the same period, the research group forecasts that metro WDM revenue will grow at a CAGR of 3%. Analysts at Omdia forecast that the metro WDM market will exceed $9 billion by 2026.

Source: Omdia. Click here for a larger version of this image.
Source: Omdia. Click here for a larger version of this image.

In addition, Dell'Oro predicts that DWDM long-haul system sales will grow faster than wavelength division multiplexing (WDM) metro system sales over this five-year period. While the DWDM market is experiencing quite a bit of "market turbulence," demand is not expected to decrease, said Jimmy Yu, VP at Dell'Oro Group, in a statement.

"In fact, the biggest issue is that demand seems to be growing faster than supply," said Yu. "Hence, even if a mild recession were to occur, we think the worst case scenario is that demand will align with supply sooner."

Yu also noted that the main difference over the next five years, from previous years, will likely be "more growth from DWDM long haul since IP over DWDM (IPoDWDM) should lower the use of WDM metro systems in data center interconnect."

Capacity shipments each year are projected to grow at an average annual rate of over 30%, according to Dell'Oro. The group also predicts that spectral efficiency will improve at an average annual rate of 9%.

Overall, the optical transport equipment market grew 2% year-over-year in Q1, largely from increased market growth in the Americas, according to another recent report by Dell'Oro. The war in Ukraine, COVID lockdowns, supply chain constraints and inflation all contributed to a decline in the optical transport equipment market in Europe, the Asia-Pacific and China.

— Kelsey Kusterer Ziser, Senior Editor, Light Reading

Be the first to post a comment regarding this story.
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE