OFC 2016: Key trends and hot topics
LightCounting releases a research note analyzing developments at OFC 2016
Demand for optics is strong across a wide range of products and this was reflected in a very positive and energetic atmosphere at OFC 2016. However it is far from a rosy picture with everybody happy and content. Suppliers are facing many challenges; the market is full of competing trends and controversy, but these are signs of progress. Being able to navigate the complex market landscape is a test for all suppliers. Challenges of working with the Cloud customers were the topics of a discussion panel hosted by LightCounting at the tradeshow.LightCounting clients can access the full version of the research note at: https://www.lightcounting.com/login.cfm
Shipments of 100GbE optics to datacenters have started. The volumes were modest in early 2016, but are rising fast. Several suppliers of 100G PSM4 modules, including Applied Optoelectronics and Luxtera, where happy to comment on this encouraging development. One interesting demo at the show was interoperability between Mellanox 1550nm PSM4 transceivers and InnoLight 1310nm PSM4 transceivers.
Source Photonics reported volume shipments of 100GbE 2 km optics in early 2016 and was among several who demonstrated a 2x50G-PAM4 QSFP28 100G module at the show. NeoPhotonics showed a single wavelength 112 Gbps link enabled by a new 56 Gbaud EML with integrated driver in a PAM4 configuration for connections of up to 2km, setting up a path to a four wavelength 400G intra-datacenter transceiver module.
Acacia, NEC and NeoPhotonics announced availability of DWDM CFP2-ACO transponders, joining Finisar, Fujitsu, Lumentum (JDSU) and Oclaro, who introduced this module last year. The compact size of a CFP2-ACO is enabled by a high-speed Indium Phosphide (InP) modulator, which remains the most challenging element of the module for suppliers. Acacia’s module uses a Silicon Photonics (SiP) modulator, setting the stage for a direct competition between InP and SiP technologies.
Industry profitability remains a hot topic. Pricing of 100GbE optics is very aggressive, but there is more will for a compromise. The target of $1/Gbps set up last year by Yuval Bachar, formerly of Facebook and now with LinkedIn, has been revised to $4/Gbps - much closer to our latest projections. Yuval Bachar went further, saying “If you need investment, ask for it, and LinkedIn will pool interest and resources from major hyperscale players to deliver it.” This sounds too good to be true, but it is progress.
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LightCounting is a leading optical communications market research company, offering semiannual market updates, forecasts, and state-of-the-industry reports based on its analysis of primary research with dozens of leading module, component, and system vendors as well as service providers and other users. LightCounting is the optical communications market’s first choice source for the accurate, detailed, and relevant information necessary for doing business in today’s highly competitive environment. For more information, visit: www.LightCounting.com or follow us on Twitter at @LightCounting.