Commercial Progress and Future Trends of 800G Optical Transceivers
Updated at Aug 20th 20241 min read
In recent years, the emergence of new services such as VR, IoT, and cloud computing has raised the bar for network bandwidth, concurrency, and real-time performance. As bandwidth demands continue to soar, while 100G, 200G, and 400G optical modules will maintain a significant market share, 800G optical transceivers are also poised to gain traction.
Electrical Interface and Optical Interface Architecture of 800G Optical Transceiver
Research indicates that for electrical interfaces, optimal architecture of optical modules is achieved when the single-channel rate of the electrical interface matches that of the optical interface, offering advantages such as low power consumption and cost-effectiveness. A single-channel 100 Gbit/s electrical interface is ideal for 8x100 Gbit/s optical modules, while a single-channel 200 Gbit/s electrical interface is suitable for 4x200 Gbit/s optical modules. Regarding packaging, 800 Gbit/s optical modules may come in various forms, including dual-density quad-channel small form-factor pluggable (QSFP-DD800) and eight-channel small form-factor pluggable (OSFP). There are three main types of optical interface architectures for 800G optical modules:
8×100G PAM4
The 8×100G PAM4 transceiver operates at 53 Gbd and utilizes 8 pairs of digital-to-analog converters (DACs) and analog-to-digital converters (ADCs), 8 lasers, 8 pairs of optical transceivers, along with 1 pair of 8-channel coarse wavelength division multiplexer (CWDM) or LAN-WDM multiplexer and demultiplexer based on Ethernet channels.
4×200G PAM4
The PAM4 transceiver operates at 106 Gbd and employs 4 pairs of DACs and ADCs, 4 pairs of optical transceivers (including 4 lasers), along with 1 pair of 4-channel CWDM or LAN-WDM multiplexer and demultiplexer.
800G Coherent Optical Module
Operating at 128 Gbd under 16QAM modulation, it utilizes 4 pairs of DACs and ADCs, 1 laser, and 1 pair of optical transceivers. It can employ fixed-wavelength lasers in coherent optical modules within data centers to reduce costs and power consumption. You can also check out the 800G ZR/ZR+ article for more information on 800G coherent modules.
Commercial Progress of 800G Optical Transceiver
Global Growth of 800G Transceiver
The 800G Optical Transceiver Components Market, valued at USD 21 billion in 2023, is projected to reach USD 32.04 billion by 2031, growing at a CAGR of 5.44% from 2024 to 2031.
The need for 800G systems is driven by telecom upgrades to 5G and beyond, requiring infrastructure capable of handling vast data volumes, user connections, and IoT devices. As telecom investments increase globally, operators are prioritizing high-capacity transceivers for scalable and competitive service delivery. The shift toward network virtualization and cloud services further boosts the demand for 800G components, providing essential bandwidth for hybrid cloud environments, data storage, and processing.
Regionally, North America leads the market, driven by telecom infrastructure, cloud service demand, and 5G investments. Europe benefits from regulatory support for high-speed internet, while Asia-Pacific, particularly China and India, is experiencing rapid growth due to rising internet usage. The Middle East, Africa, and Latin America are emerging markets, enhancing digital connectivity to meet growing demand.
Cloud Giants Boost 800G Transceiver Demand
LightCounting’s 2021 Mega Datacenter Optics Report reveals that the top five cloud companies—Alibaba, Amazon, Facebook, Google, and Microsoft—spent $1.4 billion on Ethernet transceivers in 2020, with spending expected to surpass $3 billion by 2026. The report predicts 800G transceivers will dominate by 2026, driven by growing AI-related data traffic and technological advancements. Increased demand for bandwidth in data center clusters, especially through DWDM optics, further strengthens this projection.
Google's data shows a 40% increase in regular server traffic, while machine learning traffic has grown by 55% to 60%, now accounting for more than half of the total data center traffic. This shift prompted LightCounting to revise future traffic growth projections, significantly impacting market forecasts.
The demand for high-bandwidth connections between data center clusters remains strong, despite challenges in tracking due to varying ranges. LightCounting's refined estimates illustrate why Amazon and Microsoft are currently pushing for the production of 400 ZR modules, with plans to reach 800 ZR modules by 2023/2024.
Outlook on the Development Trends of 800G Optical Transceiver
At present, 800G optical modules are still developing continuously. There are three main directions for future development trends:
Single-mode deployment: Multi-mode fiber has a short transmission distance, making the development of single-mode optical interface schemes an inevitable trend, which will benefit SiPh technology.
Single-wave 200G deployment: The current bandwidth resources at 55 GHz are somewhat insufficient, but the prospects for 200G PAM4 SiPh modulators and silicon-based lithium niobate films are promising.
Coherent deployment: As the transmission rate increases, coherent technology solutions will further expand applications to shorter distances such as 40, 20, and 10 km based on the 80 km transmission distance.
As 5G, edge computing, data center expansion, and computational demands continue to rise, the pursuit of 800G optical modules intensifies in the optical communication industry.
Conclusion
The 800G optical transceiver market is rapidly expanding, expected to reach USD 32.04 billion by 2031, driven by the growing need for higher bandwidth in telecom upgrades, 5G, cloud services, and IoT. Future developments will focus on single-mode deployment, with Silicon Photonics technology playing a crucial role. Additionally, advancements in single-wave 200G and coherent technologies will enhance bandwidth and transmission distances, further accelerating demand for 800G modules as 5G, edge computing, and data center growth continue.