O-Band Coherent-Optics Global Market Report 2025

The O-band coherent-optics market size has grown exponentially in recent years. It will grow from $1.39 billion in 2024 to $1.74 billion in 2025 at a compound annual growth rate (CAGR) of 25.1%. The growth in the historic period can be attributed to the increasing demand for high-bandwidth communication, rising adoption of cloud computing, growing data center interconnectivity, increasing video streaming traffic, and expansion of 5G infrastructure deployment.

The O-band coherent-optics market size is expected to see exponential growth in the next few years. It will grow to $4.22 billion in 2029 at a compound annual growth rate (CAGR) of 24.8%. The growth in the forecast period can be attributed to the growing need for low-latency networks, expansion of hyperscale data centers, increasing adoption of edge computing, rising transmission of AI and ML workloads, and ongoing upgrades in telecommunication networks. Key trends in the forecast period include advancements in photonic integration technology, integration with silicon photonics platforms, innovations in coherent DSP algorithms, development of energy-efficient transceivers, and progress in optical networking infrastructure.

The rising demand for high-speed bandwidth is expected to drive growth in the O-band coherent-optics market. High-speed bandwidth refers to the ability to transmit large volumes of data rapidly across communication networks. The demand is increasing due to the growth of cloud computing, which requires significant data transmission capacity to support remotely hosted services and applications. O-band coherent optics addresses this demand by enabling efficient transmission of large data volumes with low signal distortion and reduced power consumption, benefiting from its low dispersion characteristics that simplify signal processing and lower network costs. According to the Office of Communications (Ofcom), a UK regulatory authority, the average UK broadband download speed reached 69.4 Mbit/s in March 2023, representing a 17 percent year-on-year increase. This growing need for faster data transfer is therefore driving the adoption of O-band coherent-optics technology.

Companies are focusing on innovations in optical communication networks, which transmit information using light signals through optical fiber cables to achieve high-speed, long-distance data transfer with minimal signal loss. In December 2023, Coherent Corp., a US-based technology leader, launched the industry’s first 800G ZR/ZR+ transceiver. This product features advanced digital signal processing for improved signal quality, compact pluggable form factors for easy integration, and enhanced power efficiency, making it suitable for data center interconnects and telecommunications. These technological improvements address growing bandwidth requirements while reducing power consumption and operational complexity, particularly in short-reach data center optical links, shaping the evolution of high-capacity, cost-effective O-band coherent optics solutions.

In March 2022, EFFECT Photonics, a US-based provider of integrated optical communication products, acquired Viasat Inc.’s coherent optical digital signal processing (DSP) and forward error correction technology along with its engineering team for an undisclosed amount. Through this acquisition, EFFECT Photonics aims to own the complete coherent technology stack, enabling the delivery of high-performance, cost-effective coherent communication solutions and expanding its technological capabilities and market presence in the O-band coherent-optics sector. Viasat Inc. is a US-based communications company recognized for its DSP and FEC technologies, with multiple generations of design IP successfully deployed in the field.

Major players in the o-band coherent-optics market are Huawei Technologies Co. Ltd., Cisco Systems Inc., Mitsubishi Electric Corporation, Broadcom Inc., Fujitsu Limited, NEC Corporation, Nokia Corporation, ZTE Corporation, Marvell Technology, Fujikura Ltd., Juniper Networks Inc., Ciena Corporation, Sumitomo Electric Industries Ltd., Lumentum Holdings Inc., Infinera Corporation, Eoptolink Technology Inc. Ltd., PacketLight Networks Ltd., NKT Photonics A/S, FONEX Data Systems, and Quantifi Photonics Inc.

North america was the largest region in the O-band coherent-optics market in 2024. Asia-pacific is expected to be the fastest-growing region in the forecast period. The regions covered in O-band coherent-optics report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the information technology sector, particularly in hardware manufacturing, data infrastructure, and software deployment. Higher duties on imported semiconductors, circuit boards, and networking equipment have raised production and operational costs for tech firms, cloud service providers, and data centers. Companies relying on globally sourced components for laptops, servers, and consumer electronics are facing longer lead times and increased pricing pressures. In parallel, tariffs on specialized software tools and retaliatory measures from key international markets have disrupted global IT supply chains and reduced overseas demand for U.S.-developed technologies. To navigate these challenges, the sector is accelerating investments in domestic chip fabrication, diversifying supplier bases, and adopting AI-driven automation to enhance operational resilience and cost efficiency.

The O-band coherent-optics market research report is one of a series of new reports that provides O-band coherent-optics market statistics, including the O-band coherent-optics industry global market size, regional shares, competitors with the O-band coherent-optics market share, detailed O-band coherent-optics market segments, market trends, and opportunities, and any further data you may need to thrive in the O-band coherent-optics industry. This O-band coherent-optics market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

O-band coherent-optics is an optical communication technology that employs coherent detection along with O-band wavelengths to transmit data. It provides benefits such as extended transmission distance, higher bandwidth, reduced signal distortion due to low chromatic dispersion, and lower power consumption. This technology is well-suited for short-to-medium-range data center interconnects and delivers cost-effective, energy-efficient optical networking solutions.

The primary components of O-band coherent-optics include transceivers, modulators, detectors, multiplexers or demultiplexers, and other elements. Transceivers are electronic or optical devices that both transmit and receive signals, enabling two-way communication over a network or channel. These systems are offered in data rates of 100G, 200G, 400G, 800G, and other speeds, and are commonly used in data center interconnects, metro networks, long-haul networks, access networks, and more. Key end-users include telecommunications providers, cloud service providers, enterprises, and others.

The countries covered in the O-band coherent-optics market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The O-band coherent-optics market consists of revenues earned by entities providing services such as deployment, installation, maintenance, support, testing and certification services. The market value includes the value of related goods sold by the service provider or included within the service offering. The O-band coherent-optics market includes sales of coherent optical transceivers, optical modules and chips, digital signal processors (DSPs), optical amplifiers, and wavelength-division multiplexers (WDM). Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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