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Optical/IP

Another Surge for Waveguides?

Optical networking components that guide lightwaves from one place to another will show double-digit growth rates through 2010, according to a report released this week by market research firm ElectroniCast Corp.

The report details the growth of planar waveguide circuits, defined as tiny channels made of plastic, polymer, or even ceramic that direct lightwaves inside optical gear -- across optical switch fabrics, for instance. Leading vendors of planar waveguides include Agere Systems (NYSE: AGR), Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Bookham Technology PLC (Nasdaq: BKHM; London: BHM), JDS Uniphase Inc. (Nasdaq: JDSU; Toronto: JDU), Lightwave Microsystems Corp., NTT Electronics Corp. (NEL), and Nortel Networks Corp. (NYSE/Toronto: NT).

Unlike other types of waveguides, such as fiber itself or freespace optics, planar waveguides are designed on flat substrates, as the name implies, making them simpler to use in a range of applications and easier to group onto chips and boards with other kinds of components.

Demand for these so-called integrated multifunctional modules is the key force driving the planar waveguide circuit market, which was a relatively small one in 2001 but is predicted to grow 57.8 percent this year, according to ElectroniCast. Growth rates in the high 30s will continue through 2006, the firm forecasts. By 2011, the market will reach over $4.2 billion.

The firm carefully qualifies its forecast figures. "Our dollar figures represent the value of waveguides consumed, not purchased," says Stephen Montgomery, report author and president of the firm. He says that unless revenue from planar waveguide circuits is counted this way, market trends can't be predicted accurately.

"In 2000, more waveguides were produced than were actually put into products. In 2001, production was down, but actual consumption was up." These distinctions are lost if one only counts the revenue on chips produced, he says.

A key factor in the bright future of planar waveguide circuits is the flexibility of the technology. Not only is it possible for makers of waveguides to create many different types of products by tweaking the manufacturing process, it's also possible to make waveguides out of an increasing variety of materials.

This flexibility gives vendors the means to respond quickly to market conditions, and, with some ingenuity, identify increasingly efficient ways to produce their products. "The technology has been there for awhile," says Montgomery, "so the market will be driven by customer demand."

— Mary Jander, Senior Editor, Light Reading
http://www.lightreading.com
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Titanic Optics 12/4/2012 | 11:05:24 PM
re: Another Surge for Waveguides? Put a big number for the forecast in 2010 or 2011 (in this case, over $4 billion). That is still an enticingly large number. Of course, a year or so ago everybody was talking like the market for PLCs would be $4 billion in 2003 or 2004, and instead the forecast here is for $400 M. Still, with the enticingly large number those of us that grind out PowerPoint presentations for a living can keep the hype going--we'll just use a bullett point and that big number in 2011.

Come to think of it, $400 M doesn't augur well for anybody, becuase included in that is the "proven" MUX application at equipment OEMs. After that, there isn't a lot left over for "opto-electronic" integration fantasies. Win some, lose some--still can hype the 2011 number in my next PowerPoint fraud...
benson 12/4/2012 | 11:05:21 PM
re: Another Surge for Waveguides? To the editors of Light Reading.

It's curious that among the "leaders" of PLC's, you don't list Hitachi Cable, who is the #1 or 2 vendor (9000 AWG's sold, 1000 PLC interleavers and 50,000 ONU's). I know that they don't advertise with you (or at Electronicast's conferences), nor do the create "buzz". But I thought that since you are supposedly reporting, you would be interested in facts.

Of course, you do list Alcatel and Bookham. Just curious. How many devices have these "leading" vendors sold?

Benson.
OpticalCircuits 12/4/2012 | 11:05:15 PM
re: Another Surge for Waveguides?
I agree, the current PLC market leaders include NTT (NEL), Hitachi Cable, and JDSU. These three companies currently dominate the market for PLC's, while other companies, including Nortel, Alcatel, and Bookham have a much less significant share of the market. Still, today's PLC market is dominated by a single product: the AWG. Things will change considerably as planar waveguide technologies are used for a wider variety of functions, including both active and passive devices.

I do not think it is entirely clear what is actually included in this forecast's definition of "planar waveguide circuits".
endof tunnel 12/4/2012 | 11:05:11 PM
re: Another Surge for Waveguides? The number estimated by Electronicast is quite different from the RHK ( market forecast firm with better reputation than EC), whose most recent report (fall of 2001) estimated about $80 million total to be sold in 2001, and 2002 will be sequentially down by about 10% to 18%.
Physical_Layer 12/4/2012 | 11:05:10 PM
re: Another Surge for Waveguides? I also agree that Hitachi Cable is an absolutely essential vendor and should not be left off the list. On the other hand, I can't blame LR too much....they aren't involved in buying things like AWGs, so how are they to know that Hitachi is a massive player?

Did anyone catch their demo at OFC last year? They were the only AWG vendor willing to show off their athermal design by heating it up with a hair-dryer right in front of you. They compared their thermal-controlled device (not athermal) to the athermal design. A disadvantage on the athermal product was higher insertion loss, but this seems to be coming down.

Curious George 12/4/2012 | 11:05:09 PM
re: Another Surge for Waveguides? Regardless of the inaccurate volume number, what is also quite interesting is how the IP issues will play out. At present most of the "players" listed or not, are stepping all over IP held by Lucent and NTT - pioneers in this space. If Lucent would only be half as aggressive as Polaroid in defending IP, the landscape would change considerably unless numerous royalty deals were struck.
Physical_Layer 12/4/2012 | 11:05:04 PM
re: Another Surge for Waveguides? Curious George - can you elaborate a bit on the IP? I know Polaroid holds the patent for a star coupler, but what are some of the other major patents in this space, and are they as impossible to get around as Polaroid's star coupler?
electronicast 12/4/2012 | 11:04:50 PM
re: Another Surge for Waveguides? ElectroniCast's Planar Waveguide Circuit global forecasts total consumption (use) in the following products:

1) Discrete PWCs
AWGs
Switches
VOAs
Couplers / Splitters
Lithium Niobate Modulators
Interconnect Waveguides
Other Discreet Waveguides

2) Integrated Multifunction PWCs

Stephen Montgomery
President
ElectroniCast Corp.
electronicast 12/4/2012 | 11:04:50 PM
re: Another Surge for Waveguides? ElectroniCast's Planar Waveguide Circuit global forecasts total consumption (use) in the following products:

1) Discrete PWCs
AWGs
Switches
VOAs
electronicast 12/4/2012 | 11:04:50 PM
re: Another Surge for Waveguides? I just want to respond to the comment from Titanic Optics. Where stated that "everybody " was talking $4 billion in 2003 or 2004.... Please note, ElectroniCast's published report (August 1999) showed data very much in line with the new report. So - it was someone else that was saying $4 billion in 2003 or 2004 ( Not ElectroniCast).

Stephen Montgomery
President
ElectroniCast Corp.
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