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The race to higher speed optical transceivers is starting to feel like a marathon

LightCounting updates its High-Speed Ethernet Optics Report.

It is an exciting time for the industry: shipments of 100GbE devices reached close to 2.9 million units in 2017 and are on target to exceed 5 million in 2018. Yet, it does not feel like a party for suppliers. Vendors are scrambling to maintain decent profitability, as prices continued to fall sharply in 2018. Some of the 100GbE demand disappeared as buyers had placed duplicate orders or had problems with inventory buildup. Development of 400GbE products requires a lot of investment, but customers are unlikely to purchase these products until the pricing is “right”.

All options are on the table for the next round of datacenter upgrades: continue with 100GbE, switch to 200GbE, 2x200GbE, 400GbE with breakouts and even real 400GbE. Not only it is a marathon for suppliers, but the route of the race seems to be continuously changing as well.

Figure E-1 shows the correlation between introduction of the first switching silicon and early shipments of Ethernet optical transceivers with a 2 km reach – popular in datacenters. The figure includes our forecast for 200GbE, 2x200GbE and 400GbE, reflecting the diverging plans of the top hyperscale operators. Early shipments of these products will collectively retrace shipments of 100GbE, which picked up in 2016 - two years after the first 32x100G Broadcom Tomahawk switching silicon was sampled. With the 32x400G Tomahawk3 ASIC sampling in December 2017, first volume shipments of 200/2x200/400GbE will start near the end of 2019, making a real difference in 2020-2021. Most of the volume will be 200GbE and 2x200GbE with true 400GbE (2km reach) used only at the higher levels of switching.

Figure E-1: Correlation between “First Switch Silicon” and shipments of optics.

Source: LightCounting

Shipments of 100GbE (2 km reach) CWDM4 and DR1 modules will continue to grow even in 2023 (off the chart in Figure E-1). These transceivers will enable the highest 128 port radix when deployed with a Tomahawk 3 based switch – an important advantage for hyperscale operators.

Each of the top four hyperscale operators [AWS, Facebook, Microsoft, and Google] has distinctly different plans and timings for their next data rate.  Many have concerns about the readiness of 400G modules and associated technologies.

The ramp of 400GbE modules will begin with 400G-DR4 (not included in Figure E-1), but these won't actually be supporting 400GbE fat pipes. Instead, the DR4 (PSM4) interface will be broken out four ways into 100G-DR modules. We foresee a period of high-density 100G using this scheme before all of the big four move to higher speeds. Most significantly, it appears to be an open secret that Facebook will deploy 200GbE before moving on to 400GbE. Google is starting to deploy 2x200GbE modules, as planned.

100GbE transceivers today use 4x25G optics, and serial (single wavelength) 100G optics are just starting to become viable. These 100G single Lambda devices will be the first time that PAM4 optics and electronics are used, which is yet another hurdle for suppliers of optics, electronics and even test equipment.  Analog or DSP retimers/gearboxes are needed to convert 8x50G PAM4 at the module interface into 50G or 100G PAM4 optical lanes on the fibers.

Live demos of 400GbE optical transceivers were shown at OFC in March 2018 and more were shown at ECOC last week. These are still very early experiments but nevertheless impressive. Spokesman Mark Nowell of Cisco told LightCounting “Being all new modules, the host interface is usually where we’d expect problems and we saw teething issues.  Most were fixed for the public demo at ECOC.  We had full packets flowing through Arista & Cisco switches and lots of modules.”  This is encouraging but one should not assume that a ramp of 400G or even 200G is just around the corner. The customers seem to understand they will need to wait and so they have made their plans accordingly.

LightCounting’s High-Speed Ethernet Optics Report analyzes the impact of growing data traffic and the changing architecture of data centers on the market forecast for Ethernet optical transceivers with a focus on the high-speed modules used in data centers. It leverages extensive historical data on shipments of Ethernet modules combined with extensive market analyst research to make projections for sales of these products in 2018-2023. The report offers a comprehensive forecast for more than 50 product categories, including 10GbE, 25GbE, 40GbE, 50GbE, 100GbE, 200GbE, 2x200GbE and 400GbE transceivers, sorted by reach and form factors. It provides a summary of technical challenges faced by high-speed transceiver suppliers, including a review of the latest products and technologies introduced by leading suppliers.



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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.