A recent report from market research firm Cignal AI indicates that, driven by hyperscale AI architectures, 800G coherent pluggable module shipments will exceed 200,000 units in 2026, with revenue exceeding $1 billion. Cloud service providers such as Meta are adopting 800ZR+ technology for long-distance data center interconnection, and the IP-over-DWDM architecture market is expected to reach $2 billion by 2025.

ICC News: Market research firm Cignal AI’s latest “800ZR/ZR+ Forecast Update (Q2 2025)” report has significantly increased its 2026 shipment forecast for 800ZR and 800ZR+ coherent pluggable modules to over 200,000 units. This update is based on the latest market data.

This unexpected demand growth is driven by the evolution of AI infrastructure architecture. Due to power and space constraints, AI clusters are increasingly expanding to multiple sites. Cloud service providers, led by Meta, are beginning to adopt 800ZR+ modules to connect geographically dispersed data centers using IP-over-DWDM technology. The price, power consumption, and performance advantages of Gen120C optical devices enable 400G/800G long-haul transmission, rivaling the performance of traditional embedded optical interfaces.

“The new forecast reflects the accelerating shift in hyperscale enterprise deployments toward high-performance optical components,” said Scott Wilkinson, Chief Analyst at Cignal AI. “The demand for high-speed, long-haul connections between AI clusters is driving the 800ZR+ market. While this growth is primarily incremental, other interface types will be impacted when pluggable 800G performance rivals embedded solutions.”

Other key findings of the report: Pluggable coherent optical components are driving the transformation of network architectures toward IP-over-DWDM, allowing routers and switches to directly integrate DWDM optical modules. This market, already valued at $2 billion in 2025, is expected to grow to nearly $5 billion by 2029.

Cloud service providers will account for over 80% of deployments, and traditional optical hardware equipment will continue to be replaced. Meta will be an early adopter of 800ZR+, with other cloud service providers expected to follow in subsequent quarters. Companies such as Microsoft are evaluating 400G-ULH coherent modules based on 800ZR+ technology for long-haul 400G links.

Due to slower adoption rates and application overlap with 800ZR+ modules, the 2029 forecast for embedded 800G and 1.2T+ optical components has been revised downwards.

HTF’s 800G coherent dwdm solutions can help customers save costs. Please contact HTF if you require them.