BOSTON (January 27, 2026) – Coherent pluggable optics are now the primary engine of telecom and datacenter interconnect and will dominate deployments for the rest of the decade, according to research firm Cignal AI’s new Coherent Pluggable Optics Active Insight report.
The report finds that coherent pluggables now lead in deployed bandwidth, overall market size, and bandwidth growth, with 400ZR/ZR+ firmly established and 800ZR/ZR+ beginning large-scale rollouts this year in support of AI scale-across architectures. Future 1600ZR technology will extend pluggable leadership, while the use of traditional embedded optics becomes increasingly confined to the most demanding deployments – subsea and ultra-long-haul routes – where their performance advantages still justify higher cost and power.
“Coherent networking has become a pluggable world,” said Scott Wilkinson, Lead Analyst at Cignal AI. “The economics, operational flexibility, and rapidly improving performance of pluggables dictate that embedded coherent optics will be the exception rather than the rule – reserved for only the hardest routes in the network.”
Additional Findings from the Coherent Pluggable Optics Report:
- 400ZRx is now the most widely adopted coherent technology to date, and 800ZRx is on track to surpass it as hyperscalers deploy this faster speed to support DCI and AI interconnect.
- Datacenter interconnect and AI scale-across fabrics remain the primary applications for coherent pluggables today, with large deployments at Microsoft to be joined by other hyperscalers over the next several years.
- Pluggables now deliver performance comparable to embedded solutions at 400G and are closing the gap at 800G, while offering lower total system cost and cost per bit.
- As pluggable volumes rise, the overall cost per bit continues to decline, reinforcing the shift toward pluggables even as embedded modules maintain a role in the most challenging long-haul and subsea applications.
About Active Insight Reports
The Coherent Optics: It’s a Pluggable World report is part of Cignal AI’s Active Insight research service. The report reviews the evolving vendor landscape for 400ZR/ZR+ and 800ZR/ZR+, including system vendors, merchant DSP suppliers, and module manufacturers building ecosystems around next-generation pluggables. It includes the latest 800ZRx forecasts and draws on quantitative data available in the Optical Components Report.
Active Insight market reports provide real-time reporting on important developments in the optical market, including detailed analysis of key product trends, show reports, summaries of quarterly earnings calls, and vendor reports. This market news service is included free of charge with subscriptions to Cignal AI’s Transport Hardware Report and Optical Component Report, and individual reports are available for purchase separately. You may view the archive of reports and enquire about purchasing Active Insight by contacting [email protected].
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.
Contact Us/Purchase Report
Sales: [email protected]
Web: Contact us