Dell'Oro Group has released its Optical Transport 5-Year Forecast to January 2023 report.
The report indicates that demand for optical transport equipment is likely to grow at a compound annual growth rate (CAGR) of 3 percent over the next five years, reaching $17 billion by 2027. Cumulative revenue over this five-year period is expected to reach $81 billion.
It details how the market is expected to grow in 2023 due to improved component availability. At the same time, the WDM metro market is expected to grow at a lower-than-historical average rate over the next five years due to the increasing use of IP-over-DWDM.
The DWDM long-haul market is also forecast to grow at a five-year CAGR of 5 percent, and shipments of coherent wavelengths for WDM systems are expected to grow at a CAGR of 11 percent, reaching 1.2 million annual shipments by 2027. Installations of 400Gb/s wavelengths are also expected to dominate for most of the forecast period.
We expect annual growth rates to fluctuate in the short term and then stabilize to a more typical 3 percent growth rate," said Jimmy Yu, vice president, Dell'Oro Group. There is still a great deal of uncertainty in the market this year due to the economic backdrop - economists are predicting a high probability of recession in North America and Europe. At the same time, however, most optical systems equipment manufacturers are reporting order backlog levels going into the year, and we expect that much of that backlog will likely translate into revenue when component supply improves this year."
