BOSTON (January 7, 2026) – AI-driven datacenter and transport builds will push the optical components market revenue to a record high in 2025, with datacom revenue forecast to exceed $18 billion and coherent module revenue to reach nearly $6 billion, according to research firm Cignal AI’s Optical Components Report.
The report indicates that high-speed datacom modules – especially 800GbE and emerging 1.6TbE designs – will remain the primary growth engine for revenue in 2026, while telecom coherent pluggables and 1.2T+ embedded optics drive a renewed multi-year bandwidth expansion. Cignal AI expects total datacom optical component revenue to grow at a 20%+ CAGR from 2024 through 2029, reaching nearly $29 billion by the end of the forecast period.
“More than 10M 400G+ Datacom optical modules shipped last quarter for the first time, breaking $5B in revenue,” said Scott Wilkinson, Lead Analyst at Cignal AI. “The next growth engine is 1.6TbE and coherent modules for scale across applications, as Ciena, Cisco/Acacia, and Nokia ship 800ZR+ modules for applications at Meta and others.”
Additional Findings from the Recent Optical Component Report:
- Datacom optical component revenue surpassed $5 billion a quarter and will reach $30 billion in 2029; a 21% five-year CAGR driven by hyperscaler AI and higher-speed optics.
- Total shipments of high-speed datacom modules (400GbE and above) are expected to reach 42 million units in 2025, led by 800GbE growth; 1.6TbE modules will grow rapidly in 2026.
- The 800GbE module forecast increased this quarter to over 20 million units as vendors report no slowdown in demand, while the 1.6TbE forecast will exceed 5 million in 2026.
- Cignal AI estimates the addressable market for 400G+ datacom modules will reach nearly $30 billion by 2029 even as blended prices fall under $0.40 per gigabit by the end of the forecast period.
- Telecom coherent bandwidth will grow over 40% in 2025 and faster in 2026 as 400ZRx, 800ZRx, and 1.2T+ embedded optics ramp to support AI-driven scale across and and long haul builds; pluggable coherent modules are expected to carry over 60% of telecom bandwidth by 2026.
- Innolight remains the leader in 800GbE module shipments but the gap is narrowing with Eoptolink, Coherent, and Nvidia. Marvell and Acacia remain the leaders in 400ZRx with movement likely as Ciena and Nokia begin shipments of 800ZRx.
3Q25 Shipment Leaderboard
Live Presentation Available
Results from Cignal AI’s Optical Components Report are presented live each quarter by Lead Analyst Scott Wilkinson. Clients are welcome to attend the presentation Tuesday, January 13th at 11AM or register to be notified when a replay and slide download is available.
About the Optical Component 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 and total market size of datacom and telecom components, including 400GbE / 800GbE / 1.6TbE datacom transceivers used for intra-datacenter applications, as well as 400ZR / 800ZR pluggable and embedded coherent transceivers for telecom applications.
Five-year forecasts are provided for all revenue segments as well as detailed unit shipments. Data, including forecasts, are updated continuously as additional information becomes available and market events impact the industry outlook.
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, is 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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