topic: photonic integration service provider optical ... mf...discrete components—lasers,...

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© Copyright Ovum 2014. All rights reserved.

Service Provider Optical Transmission;

100G for metro Networks

Daryl Inniss, Practice Leader Components

[email protected]

September 22nd, 2014

Presented at ECOC 2014, Cannes, France

Topic: Photonic Integration

mailto:[email protected]

mailto:[email protected]

2 © Copyright Ovum 2014. All rights reserved.

Outline

Market overview—look for revenue from OTT companies

100G transmission products is key for traditional telecom and OTT

Today’s 100G metro lineside opportunity is lasers, modulators, and receivers

Analog coherent optical module in CFP2 for 2016

Demand for 200G performance starting to emerge

WAN client 100G transitioning from CFP to CFP2 today

Big 100G transceiver market after 2016 for datacom

QSFP28 is form factor but what’s inside to be determined

Fundamental market-wide problem, 100G client-side is too expensive

1) standard product needed; 2) assembly processes to lower cost; 3) silicon

photonics to play a role

Summary


Telecom is HUGE; a Two Trillion Dollar Industry

Bigger yet as OTT and digital media adds another trillion dollars!

Service Providers

Systems Vendors

Materials

Components

Finisar, JDSU, Sumitomo, Avago, II-VI, Accelink,

Fujitsu Optical Components…

Alcatel-Lucent, Ciena, Cisco, Coriant, Huawei, Juniper, …

AT&T, BT, FT, DT, Sprint, Telefonica, Verizon, Vodafone…

$6.7B+/year

$78B+/year

$1.9T+/year


Digital media revenues growing faster than incumbents

Digital media growing faster

than Fixed and Mobile Total 2013 revenues exceed $2.7tn

4.4% CAGR

‘12-’19

2% CAGR

‘12-’19

0.3% CAGR

‘12-’19

Source: Company financials and Ovum Digital media is new revenue source


Digital media has changed the market dynamics by

purchasing components directly

Service

Provider

System

vendor

Component

vendor

Traditional

New, particularly for OTT

Disintermediation can be good for component vendors revenues.

Yet it challenges vendors to identify true opportunities.


Higher OC revenues is one consequent of service

providers purchasing components directly

OC

Capex

gap due

to OTT

spend

Source: Ovum’s quarterly market share

Stuck in mud

Optical network vendors to benefit from OTT demands too


OC growth outlook driven by datacom

‘13-’19 CAGR

11%

16%

-2%

Source: Ovum’s 2014 Optical Component forecast


100G components in WAN and datacom is one of the

fastest growing product segments

100G technology is for today and tomorrow, foundation for 400G

Source: Ovum

CAGR ‘13-’19

Below 10G: -6%

10G: 10%

100G: 34%


Components for 100G metro (WAN)


What makes 100G metro so attractive?

Large market size

Metro is the “high” volume segment of the line-side market

Metro solutions will be used in long haul

Market is just starting so new opportunity for vendors

Complete redesign of all 100G WDM transmission components required for

metro due to shorter distance and lower cost requirements

Discrete components—lasers, modulators, receivers

Photonic integration required to meet size, power, and cost requirements

Integrated circuits

Modules—5x7, 4x5, CFP, CFP2 ACO, CFP2 digital

Today’s opportunity is in discrete components

Modules represent the best long-term opportunity


DSP and TIA are still critical components due to

limited merchant suppliers

DSP TIA Semiconductor

Modulator

Micro iTLA Micro ICR

Clariphy InPhi Acacia (captive) Emcore Acacia

(captive)

NEL Others? BrPhotonics JDSU Avago, Finisar

Acacia

(captive) Finisar NeoPhotonics Fujitsu OC

Ciena (captive) Fujitsu OC Oclaro Furukawa

Cisco (captive) Gigoptix Avago JDSU

Alcatel-Lucent

(captive) JDSU Furukawa NEC (captive)

Huawei

(captive?) NEC NEL NeoPhotonics

Oclaro Skorpios Oclaro

Sumitomo Sumitomo Picometrix

Teraxion Accelink Sumitomo

Teraxion Bold is shipping or ramping


CFP2 analog coherent optical is the battleground

5x7 and 4x5 CFP CFP2

Coherent (analog

and digital)

Acacia, Fujitsu

OC, NEC, Oclaro

Acacia, Civcom,

Sumitomo, Fujitsu

Optical

Components

Acacia, NEC,

Oclaro, Finisar,

JDSU, Sumitomo,

and others

Direct Detect Finisar, Menara,

Oclaro, Oplink

CFP2 analog coherent optical

• Supports OEMs with captive DSP

• Vertically integrated module vendors are well positioned

• Optical technologies include silicon photonics, InP, and silica on silicon PLC

waveguides

• Narrower linewidth tunable laser needed for metro to compensate for the DSP

• Semiconductor modulator performance is key element

Bold is shipping or ramping


200G WAN opportunity

Bandwidth demand continues

Attractive because twice the bandwidth for less than twice the price

Implementations typically reduce the transmission distance

RAMAN to help increase reach

16QAM modulation usually used

Ideal for metro

But installed base ROADMs not optimized

Market opportunity:

Subset of 100G, ideal for datacenter interconnect today

Stepping stone for 400G

Component vendors: linear drivers, linear modulators, DAC


Components for 100G client-side:

market driven by datacom


The 100G datacom application is for datacenter

architectures to support cloud services

This is 2016/2017 opportunity

Servers with 25/40G interfaces is a

gating item

The design will be based on the leaf &

spine-like architecture

More connections

High bandwidth

Single mode fiber preferred

Architectural details in development

May be service provider and

application specific

Preferred interconnections still being developed


Two segments emerging but will they converge

Agreement among hyperscale cloud

service providers?

40G as footprint for the 100G market

Rise of the active optical cable

Rise of parallel single mode (PSM)

Multiple MSAs

100G client is anywhere from stable

given the large number of MSAs that

have been introduced to support the

distance between 500m and 2 km

Traditional enterprise demand?

Will the rest of the market adopt leaf

and spine architecture

What happens to products like SR4?

Support of telecom application is also an issue under consideration


Many 100G MSAs to support 500m to 2km

PSM4 CWDM4 100G CLR4 OpenOptics 10x10 MSA Avago Avago Intel, Arista Networks Mellanox Brocade, Google

Brocade Finisar eBay, Oplink Ranovous JDSU, Neophotonics

Finisar JDSU 3ality Technica, Altera Enablence, Avago

JDSU Oclaro Aurrion, Brocade AFOP, MRV

Juniper Networks Sumitomo Dell, Ciena, Oracle Oplink, Hitachi Cable

America

Luxtera Mitsubishi Colorchip, Hewlett-Packard Exfo, Huawei

MACOM Fabrinet, Fujitsu Mellanox, Facebook

Microsoft Kaiam, MACOM Effdon, AMX-IX

Oclaro NeoPhotonics, Netronome BTI Systems

Panduit Oclaro, SAE Magnetics Cortina Systems

UC Conec Semtech, Skorpios Fourte Design, Source

Photonics

Delta Electronics Kaiam, Innolight

Verdant Networks

Vitesse, Maxim

Viscore

Best long-term solution

WDM, 2km

and longer

To 500m,

datacom CWDM, uncooled, to 2 km

Parallel single mode

But can they meet

the price target?


A crowded100G supplier space

CXP CFP CFP2 CFP4 QSFP28

SR4

3 6 LR4

9 7 8 4 ER4

3 2 3 10x10

2 SR10

4 4 3

WAN Client Datacom

QSFP28 is long-term volume form factor. Is there a real spot for CFP4.


A crowded100G supplier space: shipping

CXP CFP CFP2 CFP4 QSFP28

SR4

1 0 LR4

7 4 2 0 ER4

2 0 0 10x10

2 SR10

2 2 1

WAN Client Datacom

QSFP28 is long-term volume form factor. Is there a real spot for CFP4.


100G challenge


High 100G transceiver cost is a fundamental problem

• Market expects 10x data rate increase for 4x cost

• Current analysis suggests 100G costs way too high

Source: Ovum’s 2014 Optical Component forecast

The market’s problem is an

opportunity for others!

• New entrants

• New material systems


Silicon photonics can play a role in reducing cost

Silicon

Photonics

Indium

Phosphide Comments

Design and tools ↔ ↔ Single mode device

Tape out and mask ↑ CMOS mask very expensive

Material cost ↑ Substrate cost is small

^Processing cost ↑↑↑ Comparable cost per wafer,

but more dies for SiP***

Packaging* ↔ ↔ Expensive, both single mode

Testing final device ↑ Maturity issue for SiP

Yield ↑ InP can have yield issues?

Printed circuit board ↔ ↔ Advantage to SiP??

Capital equipment ↑ CMOS fabs are expensive, but

Other** ↑ Maturity, IP, license for SiP

* SiP hermetic?, **(Laser, maturity, IP, license); ***Relative device size unclear

^SiP wafer testing reduces cost by identifying poor performing devices

before going to the expensive packaging step


400G datacom opportunity

16 wavelengths at 25G is the brute force approach

Expect limited market opportunity

8 wavelengths at 50G is better

Dependent on ~50G electrical interface

4 wavelengths at 100G is best

Complex modulation needed

PAM4, DMT, etc.

FEC

Power consumption

Unique opportunity for silicon photonics because of the device complexity!


Availability of SiP chips changes the problem from design

and invention to assembly

Optical chip

vendor

Optical assembly expertise

needs to be established Transceiver

Optical interface chip vendor

Laser die Substrate Transceiver

assembly

Laser

driver

chip

TIA chip SiP die

Limiting

amplifier

chip

Assembly based product can favor Chinese OC vendors


Summary

Market overview—look for revenue from OTT companies

100G transmission products is key for traditional telecom and OTT

Today’s 100G metro lineside opportunity is lasers, modulators, and receivers

Analog coherent optical module in CFP2 for 2016

Demand for 200G performance starting to emerge

WAN client 100G transitioning from CFP to CFP2 today

Big 100G transceiver market after 2016 for datacom

QSFP28 is form factor but what’s inside to be determined

Fundamental market-wide problem, 100G client-side is too expensive

1) standard product needed; 2) assembly processes to lower cost; 3) silicon

photonics to play a role

Photonic Integration is key enabler for transmission at and beyond 100G


Thank you


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