& cplSiteName &

Silicon Photonics Signals Red Alert for 100G

Craig Matsumoto
3/9/2012
50%
50%

LOS ANGELES -- OFC/NFOEC 2012 -- Silicon photonics appear poised to make a run at the 100Gbit/s module market, but it's not certain this should have established module vendors freaking out.

The technology was a hot topic at OFC/NFOEC primarily because Cisco Systems Inc. (Nasdaq: CSCO) just acquired Lightwire Inc. for US$271 million -- a mind-boggling figure for a company with no known revenues. (See Lightwire Points Cisco Toward 100G.)

That's got some analysts wondering if silicon photonics, a technology that's been lingering in the market for years, might suddenly be on the verge of something big.

For example, components vendor Kotura Inc. might be ready to take on the optical modules makers such as Finisar Corp. (Nasdaq: FNSR) and JDSU (Nasdaq: JDSU; Toronto: JDU), according to analyst James Kisner of Jefferies & Company Inc. "Our checks suggest Kotura aims to launch a proprietary 100Gbit/s transceiver on a similar timeframe as Cisco (by July 2013)," he writes in a report published Wednesday morning.

His report focuses on the damage this could do to Finisar. He thinks the Cisco acquisition alone "puts 5 to 8 percent of Finisar's current revenue at risk" and that silicon photonics "could potentially reduce the cost of a [40Gbit/s or 100Gbit/s] transceiver by 90 percent."

So we're looking at cheap competition and the prospect that Cisco, a big module buyer, might possibly build its own stuff. Sounds like a recipe for an optical freak-out, at least among data-center module vendors (most of the silicon photonics talk relates to the data center, not the telecom network).

But not everybody is buying into the theory.

Playing with blocks
For one thing, Kotura denies that it's making a transceiver module.

"We haven't decided that that's the right place for us to be, but definitely we want to do the chips for those," said Arlon Martin, Kotura's vice president of marketing.

A better way to describe the situation is that Kotura has built an "engine" that can be the core of a 100Gbit/s module, says analyst Brad Smith of LightCounting . Kotura, which has made much of its money selling variable optical attenuators (VOAs) into multiple markets, was at OFC/NFOEC discussing its 25Gbit/s modulators and detectors, elements that could be part of a 100Gbit/s module. And providing the building blocks that others can use to build products would be more Kotura's style, Smith says.

(Kotura has technically broken into the 100Gbit/s market, because it's sold VOAs into some vendors' 100Gbit/s modules, Martin notes. But the VOA isn't a central part that makes the module "go." No one calls you a module maker just because you have VOAs.)

Kotura's readiness for 100Gbit/s shouldn't be that surprising. Luxtera Inc. , the other longtime silicon photonics startup, announced in November a 100Gbit/s chip that can be the basis for an optical transceiver module. (See Luxtera Tries Its Hand at 100G.)

The big kahuna
And then there's Cisco. Some analysts have speculated that Cisco's real interest is in using silicon photonics for optical backplanes and on-board optical connections -- improving routers with faster speeds and lower power consumption.

That's true to some extent, but officials tell Light Reading they've really got optical modules on the brain.

"Initially, expect us to deliver product in the form of optical transceivers in 40Gbit/s and 100Gbit/s, and in terms of distance, let's go beyond distances that VCSEL [vertical cavity surface emitting laser] technologies can address," says Massimo Prati, vice president of Cisco's Central Engineering Operations.

So, three companies have silicon photonics parts that could go into a 100Gbit/s module. Even so, optical module makers don't need to worry yet, says Rafik Ward, vice president of marketing for Finisar, a (cough) optical module maker.

"In the business we're in and the volumes we're in, it's not clear to me that this is an economic game-changer," Ward says.

One stumbling block is that silicon chips aren't necessarily cheap to build when you're talking about a high-end, low-volume technology such as 100Gbit/s. Ward points out that high-end chips are expensive to build, with lots of money going into the mask sets that are used in manufacturing. "The economics may or may not make sense," he says.

Analyst Smith agrees: "I don't see that this is going to impact the price so much. This is a high-end technology. This is 100Gbit/s stuff." Moreover, 10Gbit/s is going to dominate data centers for a while, he notes. Silicon photonics vendors aren't targeting that area yet.

He does think silicon photonics has a major chance to crack the data-center market, though. It's because VCSELs are struggling with high speeds. The devices can go 25 Gbit/s -- examples were dotted around the fringes of the OFC/NFOEC expo, Smith says -- but if they can't go further, or if 25Gbit/s VCSELs prove an unviable market, silicon photonics might step in.

While he doesn't buy that the Cisco/Lightwire combination will hurt Finisar that much, he does think it's going to have repercussions.

"I predict there's going to be a number of mergers in the transceiver space as a result of the Cisco thing," Smith says. They won't necessarily be silicon photonics -- more likely, the deals will be for any intellectual propoerty that helps with 100Gbit/s modules.

For more
To see all our OFC/NFOEC coverage, go to http://www.lightreading.com/ofc-nfoec.

— Craig Matsumoto, Managing Editor, Light Reading

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Pete Baldwin
50%
50%
Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 5:39:56 PM
re: Silicon Photonics Signals Red Alert for 100G


Right -- Cisco would become more vertically integrated, selling modules of its own making.


If Lightwire got close to production with that kind of reach, well, that would help explain the acquisition. Everyone is still perplexed about the price, though.


I agree that Brad's point is interesting, about the Lightwire deal spurring more deals. The pieces are certainly out there -- you've got Acacia now making some noise about 100G transceivers. And in addition to Luxtera and Kotura, there's Aurrion, the latest John Bowers startup. Acacia doing a transceiver is sounding less and less nuts.

rhr
50%
50%
rhr,
User Rank: Light Beer
12/5/2012 | 5:39:56 PM
re: Silicon Photonics Signals Red Alert for 100G
I'd love to know how the analyst got the 90% cost reduction figure. It does look a big deal though - a disruptive technology in the hands of a key transceiver consumer. I assume Cisco will use the 40 and 100G modules to equip its own systems and also sell them to end users? Is that correct? -áAlso LightWire had SFP+ for metro distances-á(40 and 80km).-á

LightCounting's point that it will spur consolidation is interesting. I wonder how troubled competitive switch and telecom equipment makers are too?
Flook
50%
50%
Flook,
User Rank: Light Beer
12/5/2012 | 5:39:51 PM
re: Silicon Photonics Signals Red Alert for 100G


Are any of these companies you mention, including Lightwire, have anything to show for 100G other than slideware? Seems to me there's more marketing going on here at this point.

Pete Baldwin
50%
50%
Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 5:39:44 PM
re: Silicon Photonics Signals Red Alert for 100G


Kotura's got product at 25G, for a 4x25 solution.  Luxtera participated in the 25G/28G demo at the OIF booth. I was under the impression Luxtera's 25G isn't yet in general availability but will be soon.


Lightwire, who knows.


So there really is some hardware to show.


As for putting it into final product, though -- as in, a transceiver you could buy right now -- I think you're correct that we're still not there yet.

From The Founder
Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
CenturyLink: Let's Get Past SD-WAN Hype

6|23|17   |   04:02   |   (0) comments


Technology becomes a "shiny object" unless it's properly focused on solving business needs for enterprise customers, says Bill Grubbs, network solutions architect for CenturyLink. He explains to Light Reading why SD-WAN deployments have to be tailored to specific needs – and more.
Women in Comms Introduction Videos
Infinera's Sales Director Paints Tech's Big Picture

6|21|17   |   4:14   |   (1) comment


Shannon Williams, Infinera's director of sales, shares how she achieves work's many balancing acts -- between her role and the broader company, today and tomorrow's tech and more.
LRTV Custom TV
SD-WAN Innovation & Trends

6|20|17   |     |   (0) comments


Versa CEO Kelly Ahuja discusses with Carol Wilson the current status and trends in the SD-WAN market, Versa's innovation around building a software platform with broad contextualization, and the advantages that startups can bring to the SD-WAN market.
LRTV Interviews
Ovum's Dario Talmesio on 5G in Europe

6|20|17   |   02:16   |   (0) comments


At 5G World 2017, Dario Talmesio, principal analyst and practice leader on Ovum's fixed and mobile telecoms European team, explains the emerging trends amongst European operators as they prepare for 5G.
LRTV Custom TV
Putting Power on a Pedestal

6|19|17   |     |   (0) comments


ARRIS's John Ulm says a major accomplishment of SCTE•ISBE's Energy 2020 program is increased focus on power cost and consumption, including inclusion of energy requirements in operators' RFPs and RFIs.
LRTV Custom TV
Gigabit Access: The Last-Mile Pipe for All Future Services

6|19|17   |     |   (0) comments


A Gigabit access platform being deployed today must be able to deliver all types of services to an increasing number of devices. A non-blocking architecture is necessary to support the ever-increasing growth in bandwidth demand. The Huawei Gigabit access solution is based on a distributed design that is fully scalable to deliver a unprecedented performance.
LRTV Custom TV
Key Factors to Successfully Deploy an SD-WAN Service

6|19|17   |     |   (0) comments


As service providers transition their SD-WAN solution from trials and limited deployments into production at large scale, there are important considerations to successfully operationalize these solutions and realize their full potential, without adding complexity, introducing uncertainty or disrupting current business operations. Sunil Khandekar, CEO and Founder ...
LRTV Custom TV
IoT Solutions: Rational Exuberance

6|19|17   |     |   (0) comments


IoT solutions are morphing from hype into viable business opportunities. Huawei has the platform and ecosystem support to help carriers successfully address new business opportunities in the IoT space.
LRTV Custom TV
Realizing ICN as a Network Slice for Mobile Data Distribution

6|19|17   |     |   (1) comment


Network slicing in 5G allows the potential introduction of new network architectures such as Information-centric Networks (ICN) as a slice, managed over a shared pool of compute, storage and bandwidth resource. Services over an ICN slice can benefit from many architectural features such as Name Based Networking, Security, Multicasting, Multi-homing, Mobility, ...
LRTV Interviews
Ovum's Mike Roberts on 5G Uptake

6|19|17   |   04:08   |   (0) comments


Mike Roberts, research director for Ovum's service provider markets group, explains why he has boosted his 5G subscriptions forecast.
LRTV Interviews
AT&T's Hubbard on Intersection of SD-WAN & MPLS

6|15|17   |     |   (0) comments


Rick Hubbard, SVP of Network Product Management for AT&T Business Solutions, discusses how AT&T's approach to SD-WAN fits in with its overall virtualization strategy, explains how SD-WAN can improve enterprise customers' use of the cloud and addresses the intersection of SD-WAN and MPLS.
Telecom Innovators Video Showcase
Keep Connected IoT Devices Under Control With Allot

6|15|17   |     |   (0) comments


Allot AVP of International Pre-Sales, Daniel Keidar, explains how communications service providers can protect infrastructure and service availability from flooding attacks caused by malfunctioning or bot-infected devices connected to their network.
Upcoming Live Events
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Montcalm Marble Arch
November 1, 2017, The Montcalm Marble Arch
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Netflix's Lesson in Culture Expectation Settings
Sarah Thomas, Director, Women in Comms, 6/21/2017
No Imagination: UK Chip Biz Goes Up for Sale
Iain Morris, News Editor, 6/22/2017
Kalanick Steps Down as Uber CEO
Sarah Thomas, Director, Women in Comms, 6/21/2017
BT Tech Chief Makes Plea to 5G Chip Vendors
Ray Le Maistre, International Group Editor, 6/20/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.