Datacom optical component revenue doubles in 2Q24 – report

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Datacom component revenue surged to nearly US$2.5 billion in 2Q24 as Cloud operators rushed to support AI networking infrastructure, according to the latest Optical Components Report from research firm Cignal AI. For the first time, unit shipments of 400/800GbE Datacom optics topped 5 million in a quarter. The report also says that spending on Datacom optical components in 2Q24 doubled YoY from record demand to meet AI deployments. Innolight, Coherent, and Source Photonics are the revenue leaders Datacom revenue.

“400GbE and 800GbE shipments reached record levels this quarter with demand that will continue to build through the rest of the year,” said Scott Wilkinson, lead analyst for Optical Components at Cignal AI. “400ZR and the recently introduced 800ZR were the only bright spot in an overall down market for Telecom optical components, although rising demand for advanced line system components sets the stage for a reversal.”

Cignal.AI also notes that 800GbE module demand continues to grow due to the superior cost and performance of 100Gbps/lane technology, with shipments growing 50% QoQ. Innolight is the largest supplier of these modules. The 400ZR/ZR+ market, despite its already large size, continues to scale as shipments of pluggable coherent jumped 70% YoY following two quarters of slower growth. Marvell and Acacia remain the unit shipment leaders.

The first 800ZR pluggable modules shipped this quarter and more vendors are expected to join this market by the end of the year. Cignal AI forecasts the 800ZR market to be less than 400ZR at maturity, as discussed during its recent 800ZR webinar with Google, Ciena, and Marvell. Despite record shipments of 400ZR/ZR+ modules, telecom bandwidth growth remains well below the historical trend of 35-40%/year. Service provider purchases of traditional embedded coherent WDM ports remain tepid. However, Lumentum provided positive commentary on future demand for advanced line system components and hinted at a coming reversal in Telecom component demand; a sentiment echoed by Ciena.

Cignal AI’s Optical Components Report is published quarterly and provides revenue-based market share of company sales into four optical component markets – Datacom, Telecom, Industrial, and Consumer. The report also tracks detailed unit shipments and total market size of Datacom and Telecom components, including 400GbE/800GbE/1.6TbE Datacom transceivers used for intra-datacentre applications as well as pluggable and embedded coherent transceivers for Telecom applications. Five-year forecasts are also provided for all revenue segments as well as unit shipments.

Companies included in the report are Acacia, Accelink, Adtran, ADVA, Applied Optoelectronics, Broadex, Ciena, Cisco, Coherent, Emcore, Eoptolink, Fibrehome, Finisar, Fujitsu, Furukawa Electric, HG Genuine, Huawei, Hisense Broadband, Infinera, Innolight, Inphi, Intel, IPG Photonics, Jabil, Lumentum, Marvell, Mitsubishi, Molex, NEC, Neophotonics, Nokia, OE Solutions, PacketLight, SONT Technology, Source Photonics, Sumitomo, Sumitomo Osaka Cement, and ZTE.

For more information, visit https://cignal.ai