OPTICAL TRANSPORT
“
We believe that significant volume shipments of 400ZR will occur in 2023, driven by large internet content providers (ICPs) such as Amazon, Google and Microsoſt”
architecture, cannibalising the traditional DWDM optical systems market since IPoDWDM is based on using Ethernet switches or routers. We believe significant volume shipments
of 400ZR will occur in 2023, driven by large internet content providers (ICPs) such as Amazon, Google and Microsoſt. In addition to these ICPs, there is wide interest in 400ZR by communication service providers. Although IPoDWDM will reduce the number of DWDM Metro transponders shipped in data centre interconnect (DCI), we are predicting that sales of stand-alone optical line systems (OLS) will increase, possibly doubling in 2023.
project rollouts in 2020. In many instances, service providers allowed the routes to operate ‘hoter’ than usual. However, following the initial shock of the pandemic, these service providers recalibrated, adjusting to a realisation that the network usage would not drop back down to pre-pandemic levels. As a result, the demand for new optical
equipment spiked in 2021 at a faster pace than supply, shiſting some deliveries into 2022. Hence, the North American market grew well over 10% in the first half of 2022 and is on path to grow in the full year, as long as optical vendors have enough components to manufacture the Optical Transport systems.
Supply chain shortages Component shortage was one of the biggest issues in the optical transport market this year. Many equipment manufacturers have been unable to fulfil customer orders, reducing
Fibre Yearbook 2023
their full-year revenue. We believe this supply issue will continue through the first part of 2023. Terefore, forecasting 2022 and 2023 market size is more about predicting supply than demand. For now, we believe the optical transport
market will continue to grow in 2023. Similar to 2022, we are forecasting a low single- digit rate of growth that will largely be determined by supply, foreign currency and economic conditions. Tere are two technologies that will play
an increasing role in 2023 and we believe each could have a large impact on the optical transport market – one negative and the other positive. Te first is 400Gb/s ZR (400 ZR). ZR Optics in a small form factor pluggable, such as QSFP-DD, are expected to have a negative impact on the optical transport equipment market. We anticipate that most ZR optics will be used in an IP-over-DWDM (IPoDWDM)
Future technology Te other technology that will make an impact in 2023 is 1.2Tb/s-capable coherent digital signal processors (DSP). Cisco has announced that a 1.2Tb/s coherent DSP using a 5nm chip process will be available in late 2022, and that general availability will be in early 2023. Also, based on comments from other companies, we are anticipating at least four other suppliers (Ciena, Huawei, Infinera, and NEL) of 1.2Tb/s coherent DSPs with the potential of six total vendors. As in the past, every new coherent DSP
technology drives beter transponder performance. In particular, we are expecting that 1.2Tb/s-capable coherent DSPs will deliver longer reach 400 and 800 Gb/s wavelengths, which could drive the adoption of 400Gb/s wavelengths in China’s massive optical backbone and 800Gb/s wavelengths in leading-edge ICP networks. I can say that 2022 was a turbulent year for
the optical transport market. Hopefully, much of the factors driving the market volatility will be behind us in 2023. n
Jimmy Yu joined Dell’Oro Group in 2001, and is responsible for the optical transport and microwave transmission and mobile backhaul transport market research programmes.
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