Next-gen optical transceiver revenues to hit $15.9 billion by 2028: CIR

Sales of next-generation optical transceivers should reach $15.9 billion by 2028, according to Communications Industry Researchers (CIR). The market research firm predicts in its newly released Next Generation Transceivers Markets: 2022-2028 report that such transceivers, which CIR President Lawrence Gassman described as “transceivers designed to take networking to the next data rate level (800G and beyond) and to accommodate the new wave of latency-sensitive traffic,” will generate revenues of $850 million in 2023.

“We are entering exciting new times. In future transceivers will no longer be just a transmitter plus receiver with some simple electronics thrown in. Transceivers will become smart modules appropriately designed to simplify network architecture and enable more flexible network configurations,” Gassman said in a press statement.

For most applications, the next-generation transceiver story will focus on coherent transmission. CIR notes that data rates are increasing across applications, and transceiver makers are responding by introducing coherent transceivers throughout the network, even in the access space. For this reason, CIR says that coherent transceivers alone will generate almost $4 billion in revenue by 2028. Next-generation PON transceivers will add $300 million in revenues by 2028 as well.

That said, transceiver evolution will trend toward co-packaged optics, says CIR. A new range of transceivers for edge data centers also will help shape the market as well, according to the report.

Meanwhile, to support such evolutions, transceiver supply chains will simplify considerably during the forecast period, CIR believes. The market analysts say it is unlikely that the current two-tier pricing structure for transceivers will survive as links in the supply chain consolidate. CIR also expects distributors will see their roles decrease, while OEMs will play a growing role in transceiver manufacturing. This latter trend will help overcome what CIR states is “the increasing unreliability of China as a transceiver source.”

CIR’s Next Generation Transceivers Markets: 2022-2028 report analyzes the size and timing of opportunities in the next-generation transceiver space until 2028. This includes examining the marketplace value created first by coherent technology and ultimately by co-packaging. In addition to a granular forecast from 2023 to 2028, CIR says it has included a quantitative historical sizing of the next-generation transceiver market in 2022. The report also provides profiles of several transceiver market influencers and also covers changes in the transceiver supply chain. CIR believes the report will interest OEMs, third-party transceiver suppliers, network managers and, mainstream transceiver manufacturers themselves.

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