Market research firm LightCounting said today that the market for optical transceiver electrical chips, including PAM4 and coherent DSP, will triple to today by 2027.

The electrical chips used in the optical module include laser drivers, TIA, CDR and DSPs. LightCounting predicts that from 2022 to 2027, the CAGR growth rate of the optical transceiver electronic chip market will be 18%, and the total market will grow from the current $2.4 billion to $5.3 billion, mainly for Optical Devices for Ethernet and DWDM.

PAM4 chips and coherent DSP chips are the most important products in the field of optical module electrical chips. LightCounting said that coherent DSPs have been selling more PAM4 chips in the past few years, but declined in 2021, mainly due to the reduction of new projects by telecom operators and the increase in the deployment of cheap pluggable DWDM modules. Sales of PAM4 chips doubled in 2021 and are expected to outpace coherent DSPs this year.

In addition to optical modules, PAM4 chips are also used for active cables, on-board timers that allow cleaner electrical signals from switching ASICs to pluggable ports. These three areas are close in volume, helping the PAM4 DSP chip to become the fastest growing in the entire optical communications telecommunications chip market, reaching $3 billion by 2027. Coherent DSPs will exceed $2 billion by 2027.

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