Dell'Oro:Optical Transmission Market Forecast In 2021

- Dec 31, 2020-

Every market and industry has its cycle. Among the different cycles affecting the optical transmission market, Dell'Oro analysts think that the product cycle is most worthy of emphasis.

As we all know, the optical transmission equipment market is a R&D-intensive industry, and its product cycle will last for several years, including conception, development, introduction and mainstream deployment. Therefore, it will take several years for the grand idea and proof of concept to move towards commercialization and mainstream adoption.

So, what stage will it be in 2021? Analysts believe that many areas of the optical transmission market are transitioning from the product introduction stage to the mainstream deployment stage. Therefore, many of Dell'Oro's ideas for the 2021 market revolve around the adoption of new products (many of which were first released two years ago). Here are some analysts' expectations for product adoption in 2021:

Sales of disassembled WDM systems will expand beyond data center interconnection applications

Open and disassembled WDM systems may have been available a few years ago. But the main buyers are Hyperscale companies, mainly used in data center interconnection (DCI). However, recently the use of these systems has begun to expand from these Internet content providers (ICP) to a wider customer base, including multi-service operators (MSO) and telecom operators.


600Gbps and 800Gbps line cards will enter the mainstream

Although line cards with 600Gbps capabilities entered the market more than a year ago, their adoption rate is very low due to various reasons. However, Dell'Oro believes that the 600Gbps line card adoption curve has entered an inflection point, and it will achieve rapid growth in 2021. At the same time, considering that only one manufacturer is shipping in bulk so far, analysts believe that 800Gbps line card shipments will increase next year, and there will be one or two additional suppliers that will deliver 800Gbps line cards in bulk next year. All these add up, it is expected that by 2021, the shipments of line cards supporting 600Gbps and 800Gbps will more than triple, which will stimulate suppliers to expand their production capacity significantly this year.

400Gbps is ubiquitous

Although the demand for line cards with 600Gbps and 800Gbps capabilities is expected to grow substantially, Dell'Oro believes that many (probably most) of these line cards will be used to provide 400Gbps wavelengths in metro, regional and long-distance networks. In other words, limited line cards will use the highest modulation (such as 64QAM), and most will use lower modulation (such as 16QAM and 32QAM). This is because lower modulation can provide better performance. In addition, 400ZR is entering the market for metro access applications such as data center interconnection. Dell'Oro expects most of the QSFP-DD package will be used in optical and Ethernet systems. Therefore, analysts predict that by the end of 2021, optical networks will have a large demand for 400Gbps wavelengths.

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