Data center switch

Demand for optical transport dense wavelength division multiplexing (DWDM) equipment will surpass $17 billion by 2026 and DWDM long haul system sales will grow more quickly than WDM metro systems, according to a DWDM market forecast from the Dell’Oro Group.

“Although there is a ton of market turbulence, we do not see demand for DWDM equipment letting up,” Dell’Oro Group vice president Jimmy Yu said in a press release. “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.”

The key difference between this and previous forecasts is that the firm believes growth for DWDM long haul will be greater than for WDM Metro systems because the use of IPoDWDM will obviate some of the demand for the metro systems.

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Other key findings from the DWDM market forecast, titled “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%.
  • WDM Metro revenue is forecast to grow at a five-year CAGR of 3%.
  • Capacity shipments each year are projected to grow at an average annual rate of more than 30%.
  • Spectral efficiency is expected to improve at an average annual rate of 9%.

Carrier Interest

Carrier interest in DWDM and related transport technologies includes companies like Windstream. Last October, Windstream Wholesale said that it was developing 400G wavelength technology and would partner with II-VI Inc. develop next-generation transceivers to streamline and reduce deployment costs.

One of the stated goals of the partnership was to open a direct technical path for the evolution of IPoDWDM with Reconfigurable Optical Add/Drop Multiplexer (ROADM) photonic layers. This would extend the application space beyond point-to-point data center interconnect-style networks. 

In April, Windstream Wholesale announced what it said were successful tests with II-VI and Acacia, which also involved IPoDWDM.

Also in April, Arelion announced the general availability of east to west coast U.S. routes. The routes use high capacity enhanced-reach coherent DWDM technology and an open photonic layer.

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