According to a recent forecast report by Dell’Oro Group demand for Optical Transport DWDM equipment is forecast to surpass $17 billion by 2026. Over the next five years, it is expected that DWDM Long Haul system sales will grow at a faster pace than WDM Metro system sales.
“Although there is a ton of market turbulence, we do not see demand for DWDM equipment letting up,” said Jimmy Yu, Vice President at Dell’Oro Group. “In fact, the biggest issue is that demand seems to be growing faster than supply. Hence, even if a mild recession were to occur, we think the worst-case scenario is that demand will align with supply sooner.
“Hence, we are projecting continuous growth for DWDM system revenues. The only difference over the next five years, compared to previous years, is that we are expecting more growth from DWDM Long Haul since IPoDWDM should lower the use of WDM Metro systems in data center interconnect,” added Yu.
Additional highlights from the Optical Transport 5-Year Forecast Report:
- DWDM Long Haul revenue is forecast to grow at a five-year compounded annual growth rate (CAGR) of 5 percent.
- WDM Metro revenue is forecast to grow at a five-year CAGR of 3 percent.
- Capacity shipments each year are projected to grow at an average annual rate of 30+ percent.
- Spectral efficiency is expected to improve at an average annual rate of 9 percent.