Charting the Path to 400GbE in Shenzhen and Gothenburg

LightCounting releases a research note on CIOE and ECOC



ECOC 2017 was held in Gothenburg, Sweden. It is a more compact and focused event in comparison with OFC, and offers an excellent opportunity to catch up with optics suppliers half a year after OFC and to revisit the key issues faced by the industry. Looking at these issues under the sun of Northern Europe instead of Southern California provides for a different viewing angle. Hard core travelers, attending CIOE in the tropical heat of Shenzhen, get a preview of demos from Chinese suppliers and an increasing number of western vendors two weeks ahead of ECOC. LightCounting’s team attended both of the events and this research note offers a summary of our findings.

Demand for 100GbE optics continues to exceed expectations, but we could clearly see more signs of concern rather than excitement among the suppliers. Many of them have invested heavily to increase their production capacity, but price pressure raises concerns about profitability as supply shortages ease.

Defining a clear strategy for next-generation products is critical, but few customers offer consistent and realistic targets. The next two years will test management resolve, R&D talent and production skill, defining the next wave of leading vendors. It will also be a test for different products, technologies and manufacturing methods. It seems that the industry will try a variety of approaches in search of the 2 or 3 solutions that work the best.

Finding a shortcut to low cost and power efficient 400GbE transceivers remains a priority for operators of mega data centers and suppliers of switches and routers. Cisco reinforced their commitment to achieve this goal by uniting more than 20 leading vendors into a new 100GLambda MSA, announced a week before ECOC. The key objectives include single wavelength 100GbE modules based on 100Gb/s PAM4 technology as well as 400G-FR4 and potentially 400G-LR4 modules, supplementing solutions set in IEEE standards for FR8 and LR8, that were enabled by 50G per wavelength PAM4 components.

The CWDM8 MSA announced on the first day of ECOC proposes to use 50G per wavelength NRZ optics, reflecting supplier’s concerns related to new PAM4 modulation. The industry has yet to learn how to manufacture PAM4 optics in volume and at low cost. Just like many other transitions, it is proving to be more difficult than expected. Even testing PAM4 modules is completely different and presents a learning curve to suppliers as well as their customers. However, PAM4 was selected as the future proof strategy by all leading suppliers and very few of them joined the CWDM8 MSA.

Google remains committed to deploying 200GbE optics and Amazon seems to be taking a closer look at these products. Arista, Cisco, Facebook and Microsoft do not want to hear anything about it. These companies are not willing to expend resources on transitioning to 200GbE, if 400GbE is just around the corner. Pushing suppliers to their limits, controlling the supply of key components, investing in innovation and, if necessary, even making optics internally seems to be their preferred approach.

Suppliers of optical components and modules are making a lot of progress in developing 200GbE and 400GbE solutions for mega data center applications. Their customers will always want more, prioritizing low cost and power consumption, but there is no magic in technology development. It takes a lot of work to make progress and that takes time.

“Optical and electronic components for 100G per wavelength transceivers are becoming available, but making them work together will be the next challenge for suppliers.” – mentioned one of the industry experts at ECOC.

LightCounting has been increasing projections for 100GbE and higher speed modules every six months. Our new forecast (to be released along with our “High-Speed Ethernet Optics Report” on September 29th) will continue this trend. Higher expectations for the market justify more investments from the established players and attract a lot more interest from new comers. It is no surprise that every product design, technology and business model will be tested by the market. There is no better way to find the best solution.

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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: or follow us on Twitter at @LightCounting.