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According to Dell'Oro's latest forecast report, market demand for optical transport DWDM equipment is expected to exceed $17 billion by 2026. In the next five years, the growth rate of DWDM long-distance system sales revenue will exceed the growth rate of WDM metropolitan area system sales revenue.
Jimmy Yu, vice president of Dell'Oro, said: "Despite a lot of turmoil in the market, we don't think demand for DWDM equipment has subsided. In fact, the biggest problem right now is that demand seems to be growing faster than supply. So even with a mild recession, we The worst-case scenario is that demand will soon be in line with supply.”
Additional highlights from the Optical Transport Five-Year Forecast Report (released July 2022):
1. DWDM long-haul revenue is expected to grow at a five-year compound annual growth rate (CAGR) of 5%.
2. WDM metro revenue is expected to grow at a five-year CAGR of 3%.
3. Annual capacity shipments are expected to grow at an average annual rate of over 30%.
4. Spectral efficiency is expected to increase at an average annual rate of 9%.
Yu also noted that the main difference over the next five years could be "faster growth of DWDM long-haul" compared to previous years, mainly because IP over DWDM (IPoDWDM) should reduce the use of WDM metro systems in data center interconnection.
The $17 billion in DWDM equipment revenue represents the bulk of the overall optical transport equipment market. Dell'Oro forecasts that the overall optical transport equipment market will grow at a five-year compound annual growth rate of 3% to reach $18 billion in revenue by 2026, driven by sales of DWDM systems with wavelength speeds in excess of 200Gbit/s. Researchers at Omdia are also bullish on the optical networking market, which they expect to exceed $20 billion by 2027, with the metro WDM market reaching more than $9 billion by 2026.
According to another recent report from Dell'Oro, the global optical transport equipment market grew by 2% year-on-year in the first quarter of 2022, with growth mainly coming from the Americas market. The Ukrainian war, COVID lockdown, supply chain restrictions and inflation have all contributed to the decline of the optical transmission equipment market in Europe, Asia Pacific and China.