BOSTON (April 16, 2026) – Cignal AI has added standalone Coherent WDM Pluggables as a new optical hardware segment within its Transport Hardware Report, reflecting the rapid rise of pluggable coherent optics as a key element of optical transport networks. The new segment is introduced in the 4Q25 edition and captures revenue from coherent modules sold directly to network operators from module suppliers; a category that grew 37% to $1.8 billion in 2025 and has compounded at 71% annually since 2021.
The addition coincides with a record year for the optical market. Worldwide optical hardware revenue reached $16.5 billion in 2025, growing 9% year-over-year, with Cloud operators now accounting for 30% of total spending.
“Standalone pluggable coherent optics are the source of growth in the optical transport market,” said Kyle Hollasch, Lead Analyst at Cignal AI. “With pluggables representing more than half of all WDM bandwidth shipped and AI-driven scale-across architectures requiring 5 to 20 times the bandwidth of traditional DCI, we believe it’s important that our clients get a unified view of optical hardware spending which includes these modules.”
Additional Details from the 4Q25 Transport Hardware Report:
- WDM Pluggables are forecast to reach over $5 billion by 2029 at a 30% CAGR, making them the single largest driver of incremental growth in the optical hardware market. The near-term catalyst is the massive deployment of 800ZRx modules for AI-driven scale-across networks.
- North America posted record optical revenue in 2025, growing over 30% as hyperscaler demand accelerated. The region now accounts for most of the standalone pluggable revenue and has surpassed China as the largest optical market by a wide margin.
- Long Haul and Metro continue to diverge. During 2025, Long Haul hardware sales grew 11% as hyperscalers build inter-city data center interconnect CI for AI workloads, while traditional Metro grew just 3% as IP-over-DWDM shifts spending to routers. Long Haul growth is forecast to accelerate in 2026 with the availability of multi-rail line systems.
- Vendors with hyperscaler exposure led the market for the year. Ciena and Nokia each gained roughly 2 points of market share, while Cisco posted the fastest growth rate among major vendors. Marvell enters the Cignal AI hardware market share list for the first time as a supplier of WDM Pluggables.
- China’s optical market fell 10% to its lowest level since 2018 as the 5G build cycle winds down and carrier capex remains constrained.
About the Report
Cignal AI’s Transport Hardware & Markets Report is issued each quarter and examines optical and packet transport equipment revenue across all regions, customers, and equipment types. The preliminary analysis is based on financial results, independent research, and guidance from individual equipment companies. Hardware forecasts are reviewed and released in the following weeks, along with spending trends by operator type.
The report examines revenue for metro WDM, long-haul WDM, and submarine (SLTE) equipment plus standalone WDM Pluggables. It also tracks access, aggregation, edge, and core routing equipment in six global regions. Included is tracking of equipment spending by end-customer market type, including traditional service provider, cloud/hyperscale, and enterprise/government network operators. Key market segments such as Compact Modular and Packet-OTN equipment, shipments of ROADMs, and IP-over-DWDM pluggable revenue are also included.
Vendors in the report include Adtran, Ciena, Cisco, Ekinops, Fiberhome, Huawei, Marvell, NEC, Nokia, Packetlight, Padtec, Ribbon, Smartoptics, ZTE as well as other vendors. A full report description, articles, and presentations are available on the Cignal AI website.
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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