© 2013

Silicon Photonics

Market & Applications

© 2012 • 2

Fields of Expertise• Yole Developpement is a market, technology and strategy consulting company,

founded in 1998. We operate in the following areas:

• Our expertise is based on research done by our in-house analysts, conducting open-ended interviews with most industry players.

• 30+ full time analysts with technical and marketing degrees

• Primary research including over 3,500 interviews per year

MEMS & image sensors

Photovoltaic

Advanced Packaging

Microfluidic

& Med Tech

HB LED, LED & LD

Equipment and materials

Power Electronics

© 2012 • 3

Our Global Activity

Yole Inc.

Yole Paris

Yole Japan

30% of our business is

in North America

30% of our business is

in Asia

40% of our business is

in EU Countries

Yole KoreaYole Développement Lyon HQ

Yole Taiwan

S+C

© 2012 • 4

Yole Activities in a Nutshell

MEDIANews feed / Magazines / Webcasts

REPORTSMarket & technology

Patent Analysis

Reverse costing report

CONSULTINGMarket research

Technology & Strategy

Patent Analysis

www.yole.fr

YOLE FINANCE M&A / Due Diligence /

Fund raising services

© 2012 • 5

Content

• Si Photonics challenges

• Si Photonics applications & markets

• Industry status

• Conclusions

© 2012 • 6

Si photonics in the news

since January 2013 …

(a few extracts)

© 2012 • 7

Silicon Photonics

A disruptive technology: new breed of monolithic opto-electronic devices in a

potential low cost Si process.

The vision: to deliver optical connectivity everywhere, from the network level … to

chip-to-chip.

Today, except for the light source, many optical functions can be embedded at the

SOI wafer level.

Optical die (SOI wafer)

Source Luxtera

© 2012 • 8

Optical Interconnects

Long Haul

Metro/LAN

Rack-to-rack

Board-to-board

Chip-to-chip

On-chip

Optical Fiber

Optical

Waveguides

1000 km

10 km

100 m

1 m

0.1 m

< 0.01m

Optics Since

90’s

Optics

Since 2000

The Current

Step

Optics

Beyond

2015

Distance

Thousands

Millions

Billions

Volumes

© 2012 • 9

Example: the Data Center and HPC

Problem

• Distance expands beyond 1 km

• 40G moving to 100G

• VCSELs are not adequate

• Single mode transceivers big, expensive &

power hungry

Interconnects become the system

design limiter; silicon photonics will

be a solution.

© 2012 • 10

Low Power

Consumption

Silicon Photonics

Potential advantages & challenges

Low environmental

footprint Low operating

costs

Low heating of

components

Low

manufacturing

cost

Higher density of

interconnects

Higher optical

functions

integration

Integration

• But no complete

integration (laser)

• No full CMOS process (Ge)

• Packaging issues

Reliability

Low error rate

Spectral efficiency

• Telecom standard

• Operation speed vs. InP

• Polarization dependency

SiPh

• Still high for high perf

modules (target is

fJ/b)

• Impact on reliability

© 2012 • 11

Silicon Photonics

Time to market by application

Long termMedium

termShort term

Expected time to market

ReliabilityIntegration

Low Power

Consumption

Fiber Optics

Networks

FTTx

Fiber Optics

Networks Long

Haul

Active

Optical

Cables

(Consumer)

Telecom/Datacom

Board-to-board

Chip-to-chip

Very High Speed Telecom

Medical

Fiber Optics

Network

Metropolitan

Active

Optical

Cables for

Data

CentersAOCs for HPC

(Already exists)

© 2012 • 12

Silicon Photonics Challenges

1. Few products - most of the industry has been focused on developing

individual silicon photonics elements and cores.– Modulators, VOAs, switches, laser arrays, detector arrays, etc.

– Few companies have developed integrated product solutions.

2. High cost – devices have been expensive to develop– Silicon photonics companies have had to create their own CAE/CAD programs.

– Several efforts have been established to promote CAE/CAD design tools. E.g. OpSIS and

LETI-Mentor.

3. Technical mismatches - with high volume markets– Data centers want 850-nm and 1310-nm.

4. Competition with VCSEL– VCSEL-based interconnects dominate both the data center and consumer areas with very

low prices.

5. Need for high volumes/low cost - Silicon Photonics has not been able to

achieve high enough volumes so far. Consumers want cheap products.

© 2012 • 13

Applications Examples Data rate

Telecom Used in Metro (1 - 80Km) and long haul

applications (40 -1,000 Km)

10G, 40G, 100G, 400Gbps

systems

Datacom Used in data centers (<1m - 2Km) and

campus applications (1 - 5Km)

10G, 25G, 40G, 100Gbps

interconnects between systems

Consumer Connecting desktop PC devices and

PCs with HDTVs

5G - 50Gbps

HPC & Data Centers One High Performance Computer

“supercomputer” may consume 40,000

AOCs or 250,000 mid-board modules

Up to 100 Gbps

Commercial Video Digital signage, digital cinemas, video

recording and studios; 4xx2K displays

and recording equipment

10G - 50Gbps interconnects

Metrology and sensors Measurement of time, temperature,

sound, frequency, and stress, range

Typically low data rates but

using special silicon photonics

sensors

Medical DNA, glucose, molecular and cellular

analysis, etc.

Typically low data rates but

using special silicon photonics

sensors

Military/ Aerospace/

Scientific

Used in scientific instruments at

corporate and national labs; aircraft,

space, missiles, radar, imaging and

intelligence applications.

High

© 2012 • 14

Telecom

• Telecom needs:

– Very high data rates

– Complex modulation systems

– Support for industry standards

– 25 years reliability

• Metro needs:

– Optical functionalities (e.g. ROADMs)

– Slower data rates

– Less complex modulation.

• But InP Integrated photonics has already

entered these markets mainly in FTTx and

telecom transmitters and receivers.

InP Laser Transmitter

Optical Engines

Silicon photonics

Variable Optical Attenuator

© 2012 • 15

Datacom

• Datacom products roadmap:

– Active Optical Cables - today

• Ex: Luxtera/Molex offesr silicon photonics-based

AOCs. All others are VCSEL-based.

• Main applications: HPC supercomputers, Ethernet

data center.

• Line rates moving from 10G and 14G to 28G.

– Transceivers for switching & routing – near term

• 2014+ likely applications (when 100G silicon

photonics products will be announced )

• Luxtera, Kotura demonstrated 4 x 25G transceiver

engines at tradeshows

– Servers to switches – 2016+

• High volume application dwarfing all others

SFP+ QSFP, CFP transceivers

mid-board modules

(Avago)

QSFP, CxP AOCs

(Luxtera, Finisar)

© 2012 • 16

Others applications, e.g. medical,

sensors …

• Medical applications:

– Special uses for silicon photonics in chemical,

cellular and DNA analysis.

– Example:

• Protein detection with ring resonator biosensor

• Genalyte (San Diego, CA) makes chips used for

real-time measurement of protein interactions

(DNA, molecules, etc.).

• Advantage is high sensor integration with very

small footprints.

• And also sensors based on silicon photonics

that integrate multiple sensors e.g.

– Stress and strain optical systems, Optical time

domain reflectometers (OTDR) measure distances in

fibers.

Single molecule spectroscopy

© 2012 • 17

Wavelength limitation

• Datacom/telecom requirements:

– Multi-vendor interopearablity with standards

– Data centers demand 850nm.

• Going forward, the wavelength for silicon photonics is

moving to 1310-nm and 1550nm

– Meet datacom/telecom industry standards and requirements

– could help the market expand.

© 2012 • 18

Optical Components Market Size

Silicon photonics represents a small percentage of the

optical communications component industry.

98%

2%

Silicon Photonics % of Optical Components 2017TOTAL ~$9.5B

Optical ComponentsIndustry

Silicon photonics - All

Source Yole Developpement © July 2012

,

© 2012 • 19

Molex’ AOC with Luxtera Si Photonic

Die

© 2012 • 20

Laser Module from Luxtera

© 2012 • 21

Players

Si Photonics

Activity (2012)

Business model

Product

Manufacturing

(> 100,000

chips)

R&D/

Development

Stage

R&D/MPW DevicesFoundriesFabless Systems

Product

Manufacturing

(< 100,000

chips)

OpSIS foundry services uses BAE & IME foundries

JePPIX foundry uses Oclaro & FhG HHI foundries (InP)

ePIXfab uses IMEC & LETI foundries

© 2012 • 22

University MPW foundries

Commercial CMOS Photonics foundries

Commercial InP / Silica on Silicon / etc. foundries

Foundry services are coming

© 2012 • 23

Funds Raised by Company

$528,3

$333,7

$214,7

$120,1

$85,9$52,8

$40,0 $34,3 $23,0 $2,1 $0,2$0,0

$100,0

$200,0

$300,0

$400,0

$500,0

$600,0

Raised Funds: US$ in Millions (Total is $1.4B)

Note: Infinera, NeoPhotonics, Cyoptics, OneChip develop InP products, and may or

may not introduce silicon photonics products

Red: Non-Si integrated photonics

Green: Si integrated photonics

Total funding for Si photonics

companies: ~$270 millions

© 2012 • 24

Relative Investment Efficiency

• Integrated photonics faced a downturn in the years 2004 - 2005, while the year 2000 was a real

bubble for integrated photonics investors.

• For readability reasons, Lightwire’s acquisition by Cisco was omitted: its efficiency was over

1835%.

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Relative Investment Efficiency(Post Valuation - Amount Invested) / Amount Invested (%)

(Post Valuation - Amount invested) / Amount invested (%)

General trend

© 2012 • 25

Conclusions

• Silicon photonics is an exciting field mixing optics, CMOS, MEMS and 3D stacking

technologies. All these technologies converge in Si photonics.

• The silicon photonics market is still modest with estimated sales of $65M in 2011;

expected to grow to $215M in 2017.

– Today, if is low volume in terms of dies and wafers. We estimate that 500,000 chips have

been shipped over the last 5 years; that represents a few thousand 200mm wafers.

• Data communications is the big market and dwarfs all other silicon photonics

applications.

• Very few companies are actually shipping products to the open market:

• There is a clear trend to surpass 25Gb in datacom protocols and this is where Si

photonics will have significant advantages.

– VCSELs have trouble reaching past 70 meters at 25Gb and above.

© 2012 • 26

Thank you …