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2017 was good for Silicon Photonics and fantastic for integrated InP and GaAs optics.

LightCounting updates its Report on Integrated Optical Devices

The potential impact of photonic integration on the optical communications market has captivated the imagination of the industry for the last two decades. Successes by vendors developing integrated products using Silicon photonics (SiP) led to several mergers and high-value acquisitions in 2012-2016.

Sales of SiP-based products started to ramp in 2014-2016 and reached close to $800 million in 2017 – up 22% from 2016. However, sales of optical transceivers based on integrated InP optics increased even faster - up 34% in 2017, exceeding $2.7 billion. Sales of optical transceivers and AOCs based on GaAs VCSEL arrays were up by 18% in 2017 to about $550 million, not including products for 3D sensing applications (e.g. the iPhone X), which cheered up VCSEL suppliers last year.

Sales of optical transceivers based on integrated optics exceeded $4 billion in 2017. In contrast, sales of products manufactured using discrete lasers and detectors declined to about $2 billion from $3 billion in 2016, as illustrated in the figure below.

This rapid transition is directly related to increasing sales of 100 Gbps products, which rely heavily on integrated optical technologies. Whether it is a coherent DWDM module or a client-side 4x25G QSFP28 transceiver, integrated optics is a key technology enabling these products to meet price and performance requirements. The trend is clear: more complex, higher data rate products require more integration. Demand for higher density of optical ports, lower cost and power consumption elevates optical integration to a must-have technology.

The question is whether SiP can replace more mature Indium Phosphide (InP) and Gallium Arsenide (GaAs) technologies, which have dominated the market over the last decade and already enable a variety of integrated products. Can SiP technology reduce manufacturing cost of optics or redefine business models of suppliers? Can it enable new functionality or reduce power consumption of optical connectivity by more than a factor of 10? These and many other questions are addressed in the study.

LightCounting’s updated report offers an in-depth analysis of the impact made by integration on the market for optical transceivers and related components in 2010-2017. It also presents a forecast for shipments and sales of discrete and integrated products based on InP, GaAs and SiP technologies for 2018-2023. The forecast is broken down by Ethernet, WDM, Active Optical Cables (AOCs) and Embedded Optical Modules (EOMs), and several other market segments. Products are sorted by data rate, reach and form factor into more than 150 categories.

More information on the report is available at: https://www.lightcounting.com/Silicon.cfm



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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.