40-Gig Begins Its Ramp

ANAHEIM, Calif. – OFC/NFOEC 2005 – The 40-Gbit/s Sonet/SDH generation has been just "a few years away" for more than a few years now, but vendors at the Optical Fiber Communication Conference (OFC) this week are seeing signs that systems vendors are finally ready to start preparing their 40-Gbit/s offerings.

Yes, someone says something like that every year, but this time they might be on to something. As opposed to on something.

German firm CoreOptics Inc. has already announce it's providing 40-Gbit/s subsystems to Marconi Corp. plc (Nasdaq: MRCIY; London: MONI) and claims to have another customer on the hook. For its OFC splash, CoreOptics announced it will be the sole distributor of Fujitsu Microelectronics Europe Inc.'s 40-Gbit/s chips, which provide crucial electronics inside the startup's subsystems (see CoreOptics, Fujitsu Join on 40-Gig).

Elsewhere at OFC, Opnext Inc. announced a 40-Gbit/s transceiver module conforming to the 300-pin multisource agreement (MSA), the mainstream form factor used for 10-Gbit/s transceivers (see Opnext Storms OFC).

So why is this year's 40-Gbit/s fever different from past strains? (See, for example, Yafo Scores $22 Million.) This time, some noteworthy volumes have cropped up. Opnext has three customers, and a fourth in negotiation, predicting volumes "in the range of 100 to 200 modules over the next year or two years," says Matthew Traverso, the company's senior manager of technical marketing.

Those sales won't set the world on fire -- and Traverso points out some of that demand could be double-ordering, where a customer hedges its bets by asking two suppliers for the same thing. Still, the numbers are high enough to make it likely that more than one systems vendor is considering 40-Gbit/s as more than just a lab toy.

Competition could be the catalyst, as OC768 links, once the stuff of Disney-like dreams, are starting to cross into the real world. Cisco Systems Inc. (Nasdaq: CSCO) heavily promoted the OC768 ports on its CRS-1 core router with the help of StrataLight Communications equipment (see StrataLight Powers Cisco's OC768).

And in January, T-Com, the fixed-network piece of Deutsche Telekom AG (NYSE: DT), announced plans for a network backbone based on 40-Gbit/s wavelengths. That contract win went to Marconi, which in turn enlisted CoreOptics to help develop 40-Gbit/s transponders (see T-Com Selects Marconi ).

CoreOptics, in turn, announced this week it's working with Fujitsu Micro -- the semiconductor arm of Fujitsu Ltd. (OTC: FJTSY; Tokyo: 6702) -- on the guts of those transponders. CoreOptics has exclusive use of some new Fujitsu chips, including a multiplexer/demultiplexer and an ASIC for forward error correction (FEC), a technology that cleans up the distortion in a high-speed signal (see CoreOptics, Fujitsu Join on 40-Gig).

It's the electronics that really make a 40-Gbit/s subsystem shine, CoreOptics officials say. The company's founders came from Lucent Technologies Inc. (NYSE: LU), having worked on platforms including LambdaXtreme, with a plan to "use electronics to reduct the cost of transport," says Saeid Aramideh, CoreOptics vice president of marketing. "Optics are never going to be on a fast cost curve, but if you manage to have the electronics, you can bring the cost down."

CoreOptics claims to be one of the few vendors that's well along in pushing 40-Gbit/s technology into more inexpensive forms. "We are not at twice the 10-Gbit/s cost yet, but we have a roadmap to get there," Aramideh says. "Part of it depends on how fast the market picks up," since better volumes would help drive down prices.

Marconi is the only announced customer for the technology, but CoreOptics is "in the final stages of system trials with another customer in Europe," Aramideh says.

— Craig "40 Gig" Matsumoto, Senior Editor, Light Reading

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