WDM Pluggables – now part of Cignal AI’s Transport Hardware Report

Since the days when 400ZR was just a twinkle in the eyes of engineers and product managers, Cignal AI has been covering the rise of pluggable coherent optics. The idea of a digital coherent optic, or DCO, has been around since 2014 when Acacia pioneered the 100G CFP-DCO. But mainstream adoption and use in IP-over-DWDM didn’t take off until industry standards, underlying technology, and the 400GE upgrade cycle converged around 2021.

In what already seems like the “before times”, 400ZR/ZR+ was originally envisioned as a tool to help Hyperscalers build more efficient metro DCI networks in support of cloud computing, and to lead Service Providers towards the promised land of IP/optical convergence – with power and cost savings to boot. Those use cases still remain valid, but the meteoric rise of AI has altered the trajectory of optical networking, and along with it the importance of pluggable coherent optics.

This article introduces Cignal AI’s inclusion of pluggable coherent optics – which will be referred to as WDM Pluggables – within the Transport Hardware report. This preliminary data is already incorporated in the report’s real-time Excel file and will be part of the 4Q25 final report released later this month.

AI Changes the Game

Initially envisioned as an innovation that would modestly cannibalize transponder sales and create some new price-driven demand (see Active Insight report Assessing the Impact of IP-over-DWDM), WDM pluggables are now seen as a critical enabler of the immense computing scale required to fuel AI’s growth. Scale across – the practice of extending scale-out networks across geographically distributed sites to form a single, logical GPU cluster – will drive networks requiring 5 to 20 times the bandwidth of traditional DCI.

However, WDM pluggables aren’t limited to Metro DCI and won’t always be hosted in routers or switches. Transponders within optical transport systems are incorporating pluggables and are now offered by every transport vendor in the market (see Pluggable Transponders). New pluggables are capable of long-haul performance. So, while scale across adds new demand, and IP-over-DWDM a new deployment model, the traditional optical transport market is undergoing a dramatic shift towards pluggables as well.

The first wave of WDM pluggable sales was dominated by module specialists Acacia and Marvell. However, seeing both the massive opportunity and the threat to their core businesses, network equipment manufacturers (NEMs) Ciena, Nokia, and 1Finity are bringing their own vertically integrated pluggables to market (and Acacia is now part of Cisco). As the vendor landscape has shifted, it’s grown increasingly clear that WDM pluggables aren’t a datacom product with telecom ambitions, but an integral part of the optical transport market, accounting for more than 50% of total WDM bandwidth in 2025 and 80% by 2030 (see Coherent Optics: It’s a Pluggable World).

It’s with this shift in mind that Cignal AI is incorporating WDM pluggable revenue into our Optical Transport Hardware coverage.

WDM Pluggables Hardware Segment Definition

WDM pluggables are purchased by network operators in three ways, and this determines how their revenue is assigned within the Transport Hardware report.

• Optical attached: modules procured from an optical NEM for use within transponders and muxponders of an optical transport system. This revenue is included in the Metro, Long Haul, or SLTE segments under Optical Hardware (no change).
• Router/switch attached: modules procured from a router/switch NEM for use inside a router or switch. Revenue is included in the Core, Edge, or Aggregation segments under Routing Hardware (no change).
• Standalone: modules procured directly by the network operator from any module vendor or NEM for use in applications exclusive of that vendor’s equipment. Revenue is included in a new hardware segment called WDM Pluggables under Optical Hardware.
• NOTE: Pluggables sold from a module vendor to a NEM for OEM resale are omitted to prevent double counting. The end-user sale is assigned to the NEM or reseller.

Currently, standalone modules are predominantly destined for hyperscale DCI applications, are hosted directly in switches and routers (many of them white box), and represent the bulk of total industry volume.

Companies Included in Coverage

Revenue from the following companies is included in the WDM Pluggables optical hardware segment. WDM Pluggable revenue is either attributed to the company, indicating WDM Pluggable market share, or anonymized in “other”, according to company preference.

• 1Finity
• Acacia (Cisco)
• Ciena
• Coherent
• Innolight
• Lumentum
• Marvell
• Molex
• Nokia

Historical Data and Forecast

Historical revenue data for WDM Pluggables going back to 2021 has been added to the report, impacting the size and growth rate of the Optical Hardware market from 2021 through the forecast period.