Laser Blazers

Coming from nowhere a few years ago, the market for VCSEL transceivers is set to explode as new applications appear on the scene, according to a report released earlier this month by Electronicast Corp., an independent market research firm.

Electronicast's study includes VCSELs at 850 and 1310 nm. It does not include devices at 1550nm, which will take longer to appear and, in any case, will slot into the WDM market, which operates under different rules. In WDM (wavelength-division multiplexing), the price of the laser isn't a significant part of overall equipment costs, so the price advantage of a VCSEL doesn't have much impact.

Right now, the main applications for VCSEL transceivers are Fibre Channel (a protocol for storage area networks) and Ethernet, with intrasystem links coming in third place. These markets were worth $262 million in 1999, three times more than in 1998, says Electronicast.

By 2004, the overall market for VCSEL transceivers is predicted to grow to $3.4 billion.

There are two points worthy of note in these figures. One, the fastest growing application is intrasystem links, which is expected to increase in value by a huge 77 per cent per annum on average over the next five years. Today, connections among routers, switches, and hubs in the central office are often implemented with more expensive DFB lasers at 1310nm. When 1310nm VCSELs become available sometime in 2001, they will start to take over this area, according to Bob Mayer, VP of business development at Cielo Communications Inc., a company developing a 1310nm VCSEL.

Two, a brand new application will materialize: low-cost solutions for Very Short Range (VSR) Sonet. It's designed for transporting high data rates over Sonet, and aims to make short Sonet links as cheap as Ethernet (see OIF Specs Component Standard ). Electronicast reckons that VSR Sonet will be worth $900 million in 2004, increasing to $3.7 billion in 2009.

The Optical Internetworking Forum is working on a VSR Sonet physical layer specification for moving 10 Gbit/s of data from one place to another over distances of up to 300 meters. Four options have been proposed, all of which are underpinned by VCSELs:

Single fiber solutions:

a single VCSEL operating at 10 Gbit/s (to go the distance at this speed requires the use of a long-wavelength device)

four VCSELs, each sending 2.5 Gbit/s over a different wavelength

Multifiber solutions

four VCSELs at 2.5 Gbit/s over four fibers

twelve VCSELs at 1.25 Gbit/s over twelve fibers (the advantage here is that using slower modulation speeds allows signals to go further, plus one channel can be used to protect against failure of a single VCSEL in the array)
For more details of Electronicast's report, see http://www.electronicast.com/forecasting/4028.htm. For more details of different categories of VCSEL and who's making what, follow these hyperlinks:

Short-Wavelength VCSELs.

1310nm VCSELs

1550nm VCSELs

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