Data Center Interconnect, Scale Across and Scale Out Drive This Market
Incline Village, NV. Sept. 9, 2026 — In a newly released forecast, 650 Group projects the Coherent Lite market will surpass 10 million units within the next three to five years. We expect that there will be multiple drivers of the Coherent Lite market, including Data Center Interconnect (DCI), Scale Across and Scale Out uses. We anticipate that as AI factory buildouts grow, there will be significant demand in the 2-10 km (unamplified, per the OIF 800G Coherent IA) reach that connects buildings and AI clusters. As capital spending doubles in 2026 and has the potential to double again in 2027, we expect new construction will demand these shorter-than-ZR reach links.
“As AI factory buildouts accelerate, Coherent Lite offers a lower-cost, lower-power path for the short-reach links that connect buildings and AI clusters. With capital spending on track to double in 2026 and potentially again in 2027, we expect new construction to pull for these shorter-than-ZR reach modules,” said Chris DePuy, founding analyst for 650 Group.
Coherent Lite brings the benefits of coherent optics — higher capacity per wavelength and better receiver sensitivity — to short, unamplified reaches where traditional ZR modules are over-provisioned. Per the OIF 800LR Implementation Agreement, a single Coherent Lite wavelength supports 800G Ethernet across single-span links up to 10 km without amplification, at lower power and cost than ZR or ZR+. Because the interface is standardized and form-factor-free, Coherent Lite pluggables can be deployed interchangeably in Ethernet switches and routers from multiple vendors, either as a single 800GE client or as two 400GE clients. Coherent Lite can take advantage of the current OSFP form factor, plus the upcoming form factor, XPO.
We anticipate that vendors that may benefit from growth in the Coherent Lite market could include Ciena, Cisco Systems, Coherent, Lumentum, Marvell, Nokia and others who participate in the ZR market.
For more details on the Coherent Lite and Data Center Interconnect forecast, please visit http://www.650Group.com.
About 650 Group — 650 Group is a leading Market Intelligence Research firm for communications, data center, and cloud markets. Our team has decades of research experience, has worked in the technology industry, and is actively involved in standards bodies. 650 Group focuses on leading-edge market trends and research and prides itself on being the first to market research with over 12 research programs focused on cloud trends. To learn more, please visit: http://www.650Group.com