- Ciena faces optical supply issues as hyperscaler demand keeps growing
- Corning is another vendor that’s spoken out about supply constraints
- However, Ciena’s optimistic hyperscaler revenue will start flowing in ‘26
Ciena raked in plenty of cloud orders to close out 2025, now it must contend with supply constraints to keep up with demand in the years to come.
The company is heading into 2026 with about $5 billion in backlog, and while it plans to boost capex to ensure enough capacity for existing and future demand, optical and photonic components are in short supply, Ciena CFO Marc Graff noted on Thursday’s fiscal Q4 2025 earnings call.
“As we look at what we’re seeing in Q1, we’re essentially sold out,” he said. “If we had more supply, we’d be able to sell more.”
Regarding product lead times, CEO Gary Smith said he hopes they will go down by the end of next year, but Ciena’s hyperscaler customers are only beginning to build out their sites.
Hyperscalers fuel fiber, optical supply shortages
He said three hyperscalers have tapped Ciena for their “scale across” training models, and that those deals are each worth “hundreds of millions.” Ciena expects to start earning revenue from those customers in 2026, but Smith pointed out there’s still a ton of fiber that needs to be built for data centers.
“I think the large part of this is going to be scaling up in ’27 and through ’28. These are enormous amounts of scale and commitments around massive amounts of fiber between these data centers, which takes time from an infrastructure point of view,” Smith said.
In case you were wondering exactly how hungry data centers are for fiber, Meta’s 1 million GPU data center campus in Louisiana will consume “8 million miles of optical fiber,” said Dong Hao, market technology development manager at Corning’s Optical Communications business.
Corning is another vendor facing tight optical supply constraints amid rising revenue. It’s also doubling down on manufacturing due to deals with Apple and Microsoft, one to produce iPhone and Apple Watch glass and the other to make hollow core fiber for Microsoft.
Dell’Oro VP Jimmy Yu said he hasn’t heard a whole lot of talk from optical vendors on supply issues – yet – but it’s a valid concern for 2026 given demand is growing at a faster pace than typical.
Historically, suppliers ask customers how much product they’ll need for next year and if the customers under-forecast, “then supply will be constrained for most long-lead-time items,” he told Fierce.
In Ciena’s case, it’s possible the company “recognized the higher demand for 2026 early enough and communicated it to their suppliers in time.”
Despite the supply challenges, Ciena raised its revenue guidance and is now calling for $5.7-$6.1 billion by the middle of 2026. That translates to a 24% topline revenue increase.
“I am fairly sure most of this growth will come from Optical Networking,” Yu said, but it probably won’t be all cloud. He noted Ciena this quarter saw a 70% increase in orders from communications service providers, who are a “critical part” of the optical transport ecosystem.
Gearing up for 800G
As for Ciena’s new hyperscaler wins, he noted those will drive a “very large amount” of 800 ZR+ optical pluggable shipments starting in 2026. Indeed, Ciena execs said they have already shipped 800G ZR plugs to three more cloud providers for testing and certification, and the company plans to ramp production in the first half of next year.
Ciena’s not the only one going hard on 800G gear. AOI, which is expanding its manufacturing for 800G data center transceivers, announced this week it received its first volume order from an unnamed hyperscaler (likely AWS).