Cignal AI: Coherent Pluggable Module Revenue to Reach $2 Billion in 2025

In its transport hardware report, Cignal AI has added standalone coherent WDM pluggable modules as a new optical hardware market segment, reflecting the rapid emergence of pluggable coherent optics as a critical element of optical transport networks. This new segment, introduced for the first time in the 4Q25 edition of the report, captures revenue from coherent modules sold directly by module suppliers to network operators. Revenue in this category grew 37% to $1.8 billion in 2025, representing a compound annual growth rate (CAGR) of 71% since 2021.

The introduction of this new segment coincides with record-breaking results for the optical market. Global optical hardware revenue reached $16.5 billion in 2025, up 9% year over year, with cloud operator spending now accounting for 30% of the total.

Kyle Hollasch, Lead Analyst at Cignal AI, commented: "Standalone pluggable coherent optics are the growth engine of the optical transport market. Pluggables now account for more than half of all WDM bandwidth shipped, and AI-driven scale‑across architectures require five to twenty times the bandwidth of traditional data center interconnect. As a result, we believe it is essential to provide customers with a unified view of optical hardware spending that includes these modules."

According to the 4Q25 Transport Hardware Report, the WDM pluggable module market is expected to exceed $5 billion by 2029, with a 30% CAGR, making it the single largest driver of incremental growth in the optical hardware market. The near‑term catalyst is large‑scale deployment of 800ZRx modules for AI‑driven scale‑across networks.

The North American market set an optical revenue record in 2025, growing more than 30% due to accelerating demand from hyperscale cloud customers. The region now accounts for the majority of standalone pluggable module revenue and has significantly outpaced China to become the largest optical hardware market.

Long‑haul and metro markets continue to diverge. In 2025, long‑haul hardware sales grew 11% as hyperscalers built intercity data center interconnects for AI workloads, while the traditional metro market grew only 3% as the shift to IP‑over‑DWDM pushes spending toward routers. Long‑haul market growth is expected to accelerate in 2026 with the introduction of multi‑rail line systems.

Among vendors, those with exposure to hyperscale customers led the market for the full year. Ciena and Nokia each gained roughly two percentage points of market share, while Cisco achieved the fastest growth rate among major suppliers. Marvell entered Cignal AI's optical hardware market share rankings for the first time as a WDM pluggable module vendor. China's optical market fell 10% to its lowest level since 2018, as the 5G build cycle nears completion and carrier capital expenditures remain constrained.

The report is published quarterly and examines optical transport and packet transport equipment revenues across all regions, customer types, and equipment types. It includes revenue analysis for metro WDM, long‑haul WDM, submarine line terminal equipment, and standalone WDM pluggable modules, and tracks spending on access, aggregation, edge, and core routing equipment across six global regions, as well as equipment spending trends by end customer market type. Covered vendors include Adtran, Ciena, Cisco, Ekinops, Fiberhome, Huawei, Marvell, NEC, Nokia, Packetlight, Padtec, Ribbon, Smartoptics, ZTE, and others.