Cignal AI: North American Optical Transport Market Soars 40% in Q2 2025, Boosted by AI Backbone Deployment
Time:2025-10-20
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August 19, 2025, reported by C-FOL (China Fiber Online) — Cignal AI released the 2025 Q2 Transport Equipment and Market Report. The global optical transmission market resumed growth in Q2 2025, with a year-on-year increase of 9% and revenue reaching USD 3.8 billion.
Suppliers to Cloud & Colocation (Colo) operators have become the main drivers of the rebound. Nearly 40% of Ciena‘s revenue comes from this customer group; its WaveLogic 6e has been shipped in large quantities, and the shipment volume of 400ZR/ZR+ modules rose by more than 50% quarter-on-quarter. In its first full quarter after acquiring Infinera, Nokia saw revenue from cloud customers increase by over 50% and secured new orders for 800ZR+ pluggable modules, which will be used in regional AI clusters. Cisco‘s revenue from cloud operators jumped by 31%.
Kyle Hollasch, Principal Analyst at Cignal AI, stated: "Hyperscale data center operators have almost single-handedly pulled the optical transmission market out of the 2024 slump. Cloud operators‘ spending has hit an all-time high, while the growth of service providers stems from strong demand for managed fiber networks to meet AI-related connectivity needs."
The following are additional details from the Preliminary 2025 Q2 Transport Equipment and Market Report:
- Excluding the Chinese market, global optical transmission sales grew by 15% year-on-year, mainly driven by cloud and colocation operators‘ spending surging to nearly USD 1 billion. Meanwhile, communication service providers have resumed purchases after a long period of inventory digestion.
- Cloud and colocation operators now account for one-fifth of direct spending on optical transmission. This proportion does not yet include the large amount of capacity they self-build or lease from service providers.
- Affected by the substitution of pluggable IP-over-DWDM optical modules in routers for optical transmission equipment, the share of metro WDM spending remains at a historic low. It is estimated that the annual market size shifted by this factor will be approximately USD 2 billion.
- North American operators have accelerated orders, and most vendors achieved a positive book-to-bill ratio in the quarter.
- Despite ongoing uncertainties in tariff policies and rising costs for some vendors, neither suppliers nor customers have adjusted pricing or orders accordingly.
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