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Coherent optics growth is healthy but Telecom component market remains in doldrums

BOSTON (April 22, 2024) – Datacom optical component revenue grew for the 4th straight quarter with the explosion of demand for optics used in AI clusters, according to the most recent 4Q23 Optical Components Report from research firm Cignal AI. Nvidia, Coherent, and Innolight lead in 800GbE Datacom module shipments for hyperscale AI applications. Acacia and Marvell lead in shipments of high-performance coherent interfaces based on large volumes of 400ZR pluggables.

“Datacom shipments, especially 800GbE optics, are ramping up fast and shipped units are forecast to reach 8 million in 2024,” said Scott Wilkinson, Lead Analyst for Optical Components at Cignal AI. “Telecom is slowly recovering from a bottom in Q3, but no immediate reversal is in sight.”

More Key Findings from the 4Q23 Optical Component Report:

  • Datacom revenue reached record levels, up 11% YoY, and module shipments grew rapidly in the last 2 quarters of 2023 as AI demand accelerated. For all of 2023, total Datacom revenue was down -4%, weighed down by poor performance at the start of the year.
  • After a sharp drop at the start of 2023, 400GbE port shipments recovered and grew over 50% YoY in 4Q23.
  • The high-speed Datacom optical component market is forecast to exceed $10 billion by 2025.
  • Coherent port shipments increased QoQ, but they were down slightly YoY. 400ZR/ZR+ shipments grew 25% QoQ.
  • The market for embedded and pluggable coherent optical modules is forecast to exceed $6 billion in 2024.
  • Huawei, Infinera, Acacia, and Nokia shipped Gen120P 1.2T high speed coherent ports for revenue in 4Q23, which is the first quarter of production shipments for this new technology.
  • Cignal AI’s 2024 forecast for 800GbE modules was increased 8% based on accelerating demand, and initial forecasts of 1600ZR modules were also added to the Optical Components report this quarter.

Live Presentation Available

Results from Cignal AI’s Optical Component Report are presented live each quarter by Lead Analyst Scott Wilkinson. Clients are welcome to login and register for a presentation next week, April 30th at 11 AM ET.

About the Report

Cignal AI’s Optical Components Report is published quarterly and provides revenue-based market share of company sales into four optical component markets – Datacom, Telecom, Industrial, and Consumer.

The report also tracks detailed unit shipments of Datacom and Telecom components, including 400GbE/800GbE/1.6TbE Datacom transceivers used for short-reach applications as well as pluggable and embedded coherent transceivers for Telecom applications. Five-year forecasts are also provided for all revenue segments as well as unit shipments.

Companies included in the report are Acacia, Accelink, Adtran, ADVA, Applied Optoelectronics, Broadex, Ciena, Cisco, Coherent, Emcore, Eoptolink, Fiberhome, Finisar, Fujitsu, Furukawa Electric, HG Genuine, Huawei, Hisense Broadband, Infinera, Innolight, Inphi, Intel, IPG Photonics, Jabil, Lumentum, Marvell, Mitsubishi, Molex, NEC, Neophotonics, Nokia, OE Solutions, PacketLight, SONT Technology, Source Photonics, Sumitomo, Sumitomo Osaka Cement, and ZTE.

A full description of the report methodology including an up-to-date listing of all product categories, as well as reports and presentations, are available on the report page.

About Cignal AI

Cignal AI provides active and insightful market research for the networking component and equipment market and the market’s end customers. Our work blends expertise from a variety of disciplines to create a uniquely informed perspective on the evolution of networking communications.

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