Industry News
Is the global optical transmission market experiencing a deep adjustment?
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Author : JIUZHOU
Update time : 2025-03-14 14:16:25
After adjusting for cycles from 2023 to 2024, the optical transmission market will grow again in 2025. This growth will happen as inventory adjustments finish at the end of 2024. Inflation will ease, and the economy will recover. The compound annual growth rate will reach 4% over the next five years.
A well-known global market research firm recently reported that the optical transmission market will grow again in 2025. This growth will follow a cyclical adjustment period from 2023 to 2024. The market faces many pressures like too much inventory, weak economy, and rising interest rates. Still, it shows important changes in technology, regional differences, and supplier competition.
Market performance: from slowing growth to deep adjustment
In 2023, the global optical transmission market made $16 billion. This was a 2% increase from the previous year.
This decline set the stage for future changes. As we enter 2024, the market is facing a sharp decline.
Key drivers:
-Overstock
-Macroeconomic challenges
-Regional differentiation
Technology trends: High-speed wavelength and DCI demand dominate the future
1. Wavelength speed jump:
1.6Tbps wavelength technology will be available for sale in 2025. The 2.4Tbps coherent technology is expected in 2027. This will help improve spectrum efficiency and reduce costs.
2. Structural shift in DCI demand:
Long-distance DWDM deployment for connecting data centers will grow at a rate of 12% over five years. However, demand in cities will slow down. This is due to the rise of IPoDWDM technology, which allows coherent transmission through routers and switches.
3. Supply chain reshaping:
Internet content providers will directly purchase nearly 50% of WDM systems, promoting changes in manufacturer cooperation models.
Regional market: China's resilience is prominent, and the dawn of hope is beginning to emerge in North America
China: With the recovery of optical backbone network investment in 2023, the share continues to rise;
North America: The order flow of leading manufacturers has improved, and inventory digestion is nearing the end;
Future Outlook: The recovery cycle will start in 2025
Well-known market research firms expect that inventory adjustments will end by late 2024. They also predict easing inflation and economic recovery.
As a result, the market should start growing again in 2025. The expected growth rate is 4% each year for the next five years. By 2029, the market size is expected to reach US$16 billion.
Growth engine:
-Demand in North America and Europe has bottomed out, and ICP capital expenditure has expanded;
-Demand for commercial activation and upgrade of 1.6T/2.4T high-speed wavelength technology;
-Continued investment in network infrastructure in emerging markets.
Risk warning: Geopolitics, interest rate environment and the rhythm of technology replacement are still key variables.
The cyclical adjustment of the optical transmission market confirms the resilience of the technology-driven industry. The growing demand for computing power and global digital infrastructure competition will shape the future. Technological progress and regional balance will be key areas for manufacturers to succeed.
A well-known global market research firm recently reported that the optical transmission market will grow again in 2025. This growth will follow a cyclical adjustment period from 2023 to 2024. The market faces many pressures like too much inventory, weak economy, and rising interest rates. Still, it shows important changes in technology, regional differences, and supplier competition.
Market performance: from slowing growth to deep adjustment
In 2023, the global optical transmission market made $16 billion. This was a 2% increase from the previous year.
This decline set the stage for future changes. As we enter 2024, the market is facing a sharp decline.
Key drivers:
-Overstock
-Macroeconomic challenges
-Regional differentiation
Technology trends: High-speed wavelength and DCI demand dominate the future
1. Wavelength speed jump:
1.6Tbps wavelength technology will be available for sale in 2025. The 2.4Tbps coherent technology is expected in 2027. This will help improve spectrum efficiency and reduce costs.
2. Structural shift in DCI demand:
Long-distance DWDM deployment for connecting data centers will grow at a rate of 12% over five years. However, demand in cities will slow down. This is due to the rise of IPoDWDM technology, which allows coherent transmission through routers and switches.
3. Supply chain reshaping:
Internet content providers will directly purchase nearly 50% of WDM systems, promoting changes in manufacturer cooperation models.
Regional market: China's resilience is prominent, and the dawn of hope is beginning to emerge in North America
China: With the recovery of optical backbone network investment in 2023, the share continues to rise;
North America: The order flow of leading manufacturers has improved, and inventory digestion is nearing the end;
Future Outlook: The recovery cycle will start in 2025
Well-known market research firms expect that inventory adjustments will end by late 2024. They also predict easing inflation and economic recovery.
As a result, the market should start growing again in 2025. The expected growth rate is 4% each year for the next five years. By 2029, the market size is expected to reach US$16 billion.
Growth engine:
-Demand in North America and Europe has bottomed out, and ICP capital expenditure has expanded;
-Demand for commercial activation and upgrade of 1.6T/2.4T high-speed wavelength technology;
-Continued investment in network infrastructure in emerging markets.
Risk warning: Geopolitics, interest rate environment and the rhythm of technology replacement are still key variables.
The cyclical adjustment of the optical transmission market confirms the resilience of the technology-driven industry. The growing demand for computing power and global digital infrastructure competition will shape the future. Technological progress and regional balance will be key areas for manufacturers to succeed.
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