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100G Growth Fuels Race to 400G & Beyond

Simon Stanley
Heavy Lifting Analyst Notes
Simon Stanley
7/24/2017
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The widespread deployment of 100G connections in data centers and across networks is driving demand for 400G solutions and funding the development of 400G components. Those vendors that have successfully developed competitive 100G optical modules and components are simultaneously growing 100G volume, developing lower-cost 100G solutions and introducing 25G, 50G, 200G, 400G and 600G products.

The first solutions for 100G Ethernet were introduced in 2010. From then 100G shipments grew slowly, held back by expensive optical modules and limited demand. The introduction of QSFP28 modules through 2016 has dramatically reduced the cost of 100G ports and the shift to cloud services has driven massive demand from hyperscale data center operators.

2017 has therefore proved to be the "hockey-stick" year for 100G Ethernet with optical module vendors struggling to meet demand. Growing 100G manufacturing volume and reducing costs are key objectives for optical module and component suppliers as they seek to "cash in" on this demand. Cost reduction approaches include innovative module assembly, silicon photonics, smaller modules such as SFP-DD and reducing the number of lanes/wavelengths.

The first 400G optical modules for use in data center and enterprise applications are becoming available in the CFP8 form factor. The next generation will use QSFP-DD or OSFP. 100G using DP-QPSK coherent receivers is already widely deployed for data center interconnect (DCI), metro and long-haul applications. Enhanced DSPs are now enabling 200G with 16QAM modulation and the next generation will support 400G and 600G with 64QAM modulation. These developments are crucial to meeting the bandwidth demands between data centers.

Heavy Reading's new report, "From 25/100G to 400/600G: A Competitive Analysis of Optical Modules & Components," identifies and analyzes the full spectrum of vendors developing optical modules and components for 25G, 100G, 200G, 400G and 600G ports. The report profiles 49 vendors and analyzes more than 450 different products and product families, identifying their key features and highlighting the advantages they hold for service providers and telecom solution providers. The report includes not only detailed information on the components, but also insights into how the overall optical networking market is developing.

QSFP28 modules and active optical cables for 100G data center and enterprise applications are available from almost 30 vendors. Many vendors have also introduced SFP28 modules to support 25G Ethernet to servers. 100G CFP, CFP2, CFP4 and CXP modules are available from some vendors. The highest volume QSFP28 modules are PSM4 and CWDM4 ports used in hyper-scale data centers and other applications. The first 200G optical modules have been introduced using QSFP56 with PAM4 coding or QSFP-DD with dual 100G ports.

DCI, metro and long-haul systems use DSPs integrated onto a line card module or into a pluggable CFP-DCO module. Most of the leading telecom system manufacturers have their own DSP designs. Several companies are using DSPs on the line card with pluggable CFP2-ACO modules that just include the analog and optical components. These support 100G, 200G, 400G and 600G data rates. This is now an area of significant innovation with vendors developing next-generation 400/600G DSP designs, 200G CFP2-DCO modules and 400G modules. The OIF is working on the 400ZR interface for 80-120km and Ciena is making its 400G coherent DSP available to three optical module vendors.

Coherent transceiver DSP and gearbox devices, PAM4 PHY and CDR devices, optical driver/receiver arrays and packet-optical transport platform (P-OTP) devices are key to building these optical modules and line cards. The latest devices use 16 nm CMOS technology and the next generation of DSPs are expected to use 7 nm technology. PAM4 PHYs and 50G CDRs are enabling dual wavelength 100G and quad wavelength 200G solutions. The next generation of devices will support single wavelength 100G.

We are seeing huge demand for 100G in the data center and elsewhere and expect the 100G optical module market to become very competitive through 2018, as the cost of modules is reduced and production volumes grow to meet the demand. The first solutions for 200G and 400G are already available. The industry is now working on cost reduced 100G, higher density 400G and possible solutions for 800G and 1.6 Tbit/s. All approaches are using advanced coding and modulation, particularly PAM4 for data centers and enterprise and 16/64QAM for DCI, metro and long haul. These developments require substantial investment by vendors and this is likely to lead to further consolidation in the industry.

— Simon Stanley, Analyst at Large, Heavy Reading

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