BOSTON (April 21, 2026) –Market research firm Cignal AI recently published the Fourth Quarter and Full Year 2025 Optical Components Report, which reveals a market transformed by hyperscaler AI investment. Datacom optical component revenue alone exceeded $19 billion for the year, marking a more than 70% increase over 2024.
“AI has completely reshaped the optical networking market, starting inside the datacenter and now outside as well. Hyperscalers revised capex forecasts even higher in 4Q25, and our unit forecast increase mirrors these aggressive revisions,” said Scott Wilkinson, Lead Analyst for Optical Components at Cignal AI. “800GbE modules in particular are on an unprecedented trajectory, even as 1.6TbE starts to ship in volume and ELSFP orders signal an upcoming wave of CPO deployments. And outside the datacenter, the race to fill Meta’s 800ZR+ scale-across orders has just begun.”
Additional Details from the 4Q25 Optical Components Report:
- Quarterly datacom revenue was up 87% year-over-year. For the year, Innolight led datacom revenue with more than $5 billion, followed by Eoptolink and Coherent.
- Over 42 million high speed (400G+) datacom modules shipped in 2025, up more than 80% over 2024, split between 400GbE and 800GbE.
- 800GbE shipments were the growth driver, and demand is not expected to slow through 2027 despite the introduction and adoption of 1.6TbE.
- 1.6TbE module shipments began ramping, heavily weighted to the fourth quarter. Almost 10 million are forecast for 2026.
- 2025 Telecom optical component revenue was up more than 35% over 2024, while deployed coherent telecom bandwidth grew nearly 50% year-over-year.
- 400ZR/ZR+ pluggable optics accounted for almost half of all telecom bandwidth deployed in 2025.
- 800G pluggable shipments aligned with Cignal AI’s 2025 forecast and will be the highest area of growth for coherent interfaces in 2026.
- 1.2T+ embedded modules shipped from six different vendors in 2025 with nearly 100k modules shipping for the year.
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 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. Technology analysis for ELSFPs used in CPO applications and OCS hardware are also included as part of the report.
Five-year forecasts are provided for all revenue segments as well as detailed unit shipments. Data, including forecasts, are updated continuously as new 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, 1Finity, Furukawa Electric, Furukawa FITEL, HG Genuine, Huawei, Hisense Broadband, Infinera, Innolight, Inphi, Intel, IPG Photonics, Jabil, Lumentum, Marvell, Mitsubishi, Molex, NEC, Neophotonics, Nokia, O-Net Technologies, 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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