What's Driving The Future Of Optical Networking

By John Oncea, Editor

Fiber optics has grown from a small experiment to a reliable resource for networking, and its development into how we use it today is an interesting tale.

Optical datacom – the use of light to transmit data – has been connecting networks for years, helping transfer video for organizations needing to deliver messages across long distances. In recent years, it has seen increased use for entertainment and data transfer for networks of all sizes.

Noted for its ability to transfer data quickly, optical datacom – also referred to as fiber optics – has become vital for television, telephones, and internet connections. Streaming, which requires long reach worldwide, also relies on optical datacom to deliver today’s blockbusters to homes without lag or disruption.

Throwing in the demand from company helplines and data centers for the high-speed data transfer necessary to operate and assist the people who rely on their services, it becomes clear that optical datacom will grow in importance for the foreseeable future, given the world’s need for reliable data transfer and almost immediate access to the internet.

Optical Datacom’s Past And Present

Optical datacom, according to CableWholesale, has a rich history, playing a foundational role in global communications and the internet. The roots of optical datacom stretch back to human history with the use of visual signaling (like smoke signals and optical telegraphs in the 18th and 19th centuries).

The invention of the laser in 1960 sparked new interest in optical data transmission. Researchers like Charles Kao demonstrated that pure glass fibers could transmit light over distance, earning him the title “Father of Fiber Optics.” His 1966 research with George Hockham proved that light loss in glass could be minimized.

In the 1970s, companies such as Corning Glass Works developed the first low-loss optical fibers. The first commercial fiber-optic communication system was deployed in Chicago in 1975. The 1980s and 1990s witnessed rapid advances, including the invention of the Modified Chemical Vapor Deposition (MCVD) process and the widespread adoption of laser diodes, which made fiber optics practical for global communications.

Today, optical datacom is the backbone of the internet and cloud infrastructure. Modern telecommunication and data center networks deploy optical fibers for nearly all high-speed and long-distance connectivity. The market for optical datacom transceivers, critical components in facilitating data transfer over fiber, is massive and growing. According to DiMarket, the market is estimated at $12.3 billion this year, with projections for strong growth.

Some of that growth will be attributed to data centers and cloud. New data centers use pluggable and co-packaged optical transceivers at speeds such as 400G, 800G, and even 1.6T (terabits per second). These technologies enable the interconnection of thousands of servers, supporting modern cloud computing, Big Data, and AI workloads.

Optical Datacom’s Future Trajectory

The short- and long-term futures of optical datacom are defined by rapid sophistication in component technology, relentless demand from AI/cloud applications, and continuous advances in photonic integration, all set against the backdrop of global digitalization and bandwidth growth.

According to Cignal AI, the datacom optical component market is forecast to grow robustly throughout the second half of 2025, with revenue expected to surpass $16 billion – a 60%+ increase year-on-year – primarily driven by surging 400G and 800G transceiver shipments and the introduction of 1.6T modules in hyperscale deployments.

Although 1.6T modules will be introduced in volume, their adoption will remain below 1 million units in 2025, and the installed base will still be dominated by 400G/800G. Key near-term technical themes, writes Arelion, include:

• Pluggable Coherent Optics: 400ZR and 800ZR are reshaping metro and regional data center connectivity, with higher data rates and coherent signal processing extending reach and capacity. Multi-vendor interoperability and emerging standards are pushing open interfaces, reducing vendor lock-in.
• Standardization and Disaggregation: The move toward disaggregated networks, where hardware and software components are decoupled, is gaining momentum. Industry collaboration via groups like the OIF is smoothing over integration complexities.
• AI-Driven Design and Management: AI and ML techniques are increasingly embedded for network monitoring, traffic management, and predictive maintenance, driving down operational costs and improving reliability.
• Ultra-Low Loss and High-Bandwidth Fiber: Advanced G.654.E fibers with attenuation below 0.17dB/km, enabling greater reach and throughput for backbone and submarine networks.
• Integrated Photonics: Photonic integrated circuits (PICs) and co-packaged optics (CPO) are beginning to move from research to early commercialization, promising further density and power efficiency improvements.

With single-mode and wavelength-division multiplexing (WDM) fibers increasingly nearing theoretical capacity limits, space-division multiplexing (SDM) and multi-band transmission are active research frontiers, the University of Stuttgart adds. These approaches use multiple cores or spatial paths within a fiber to exponentially scale total system capacity and will be crucial as data rates move to and beyond 1.6T and 3.2T per port.

AI’s role will move from network optimization to direct photonic device control, adaptive modulation, and real-time fault management, according to Shenzhen HTFuture. Concurrently, quantum communication protocols, leveraging fiber’s low latency and low loss, are anticipated to become mainstream for secure data transmission in critical applications.

In addition, rising 6G mobile standards and the explosion of IoT will shift the architecture of optical networks. Edge computing and “East Data, West Computing” models, particularly visible in East Asia, will drive massive regional data flows, demanding agile, reconfigurable, and intelligent photonic fabrics.

Finally, even as capacity rises, the efficiency curve – bits per joule – will be under constant industry scrutiny, according to Connector Supplier. Co-packaged optics, greater photonic integration, and intelligent network resource management will remain decisive in aligning optical capacity scaling with sustainability goals.

Optical datacom evolved from experiments in the 1960s/1970s to the global digital backbone it is today, underpinning rapid growth in cloud, 5G, and AI. The future promises orders of magnitude higher capacity, power efficiency, and integration driven by innovations such as silicon photonics and co-packaged optics, all while relentless demand fuels technological and market expansion.