Optical transport market to grow 16% this year

“We raised our full year 2026 forecast from 10% to 16% following standout results in the first quarter of 2026,” says Dell’Oro vice-president Jimmy Yu. “We estimate that the optical transport market grew 20% year-over-year in the first quarter of this year, driven by demand for datacentre interconnect. However, many key optical suppliers are noting a growing backlog of orders as lead times continue to stretch out. We think supply may be the biggest factor keeping the optical transport market’s growth rate from being even higher this year due to all the AI datacentre build-outs.”

The market grew 20% y-o-y  in 1Q 2026 due to double-digit revenue increases in both WDM Systems and IPoDWDM ZR/ZR+ optical pluggable modules.

Revenue associated with direct purchases for datacentre interconnect grew an estimated 40% year-over-year.

North America, Europe and the Middle East Africa regions grew year-over-year, while Asia Pacific and Latin America declined.

On a trailing four-quarter basis, the top optical transport systems vendors with over 80% combined revenue share were Huawei, Ciena, Nokia and ZTE. For IPoDWDM ZR/ZR+, the lead vendors were Marvell and Cisco Acacia.

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