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Report Details Component Hot Spots

Light Reading
News Analysis
Light Reading
8/27/2001

Components that help carriers make the most of installed fiber will succeed in the coming months, while those aimed simply at boosting raw capacity will collect dust for at least another two years.

So says a report titled "Component Conundrum," published this month by Light Reading's subscription service, Optical Oracle.

The report posits that carriers want equipment that lets them carry more data on installed fiber. Because of this, arrayed waveguide gratings (AWGs), interleavers, and some types of tunable components are likely to sell relatively well over the next 12 to 24 months. In contrast, 40-Gbit/s transport chips are "at least two years away" from market penetration of any significance.

"What carriers want and need right now are lower costs and improved efficiencies," says Chris Bulkey, Optical Oracle research analyst and author of the report. That means more channels carved out of existing fiber, not faster pipes.

AWGs are key to creating these channels. AWGs have succeeded in dominating today's 40-channel DWDM market because, according to the report, they offer lower losses than thin-film filters for this application. To reach 80 channels and above, however, AWGs will need a boost from interleavers. Companies that make these components include Avanex Corp. (Nasdaq: AVNX), JDS Uniphase Inc. (Nasdaq: JDSU; Toronto: JDU), and Oplink Communications Inc. (Nasdaq: OPLK).

Tunable components also are hot, because they promise a way to make the growing number of DWDM channels more manageable. Specifically, tuning can be used to add, drop, or switch channels via software. And some forms of tunable components open the possibility of routing by wavelength -- a dramatic improvement over today's routing methods, which rely on electronic mechanisms.

But tunable components will likely grow more slowly than AWGs in the near term. According to the report, carriers need to be shown that systems based on tunable lasers and filters can be deployed cost effectively and meet performance expectations.

A number of manufacturers, including Agere Systems (NYSE: AGR), Bandwidth9 Inc., Fujitsu Ltd. (KLS: FUJI.KL), Marconi Communications PLC (Nasdaq/London: MONI), and Nortel Networks Corp. (NYSE/Toronto: NT), are working to convince carriers (via system OEMs) that tunable gear is viable. What's more, integrated optical add/drop multiplexers equipped with tunable filtering capabilities are starting to emerge in products from the likes of Bandwidth9, Cidra Corp. (Nasdaq: CIDC), and Solus Micro Technologies Inc..

While these components are likely to flourish, others, especially 40-Gbit/s transport chips, will be delayed. Carriers are seeking to mine the capacity they've already built out, and the falling cost of 10-Gbit/s systems is convincing them to focus on that data rate as the backbone standard. According to the report, it will be at least two to three years before carriers seek to up the backbone ante with new baseline speeds.

— Mary Jander, Senior Editor, Light Reading
http://www.lightreading.com

Editor's Note: Light Reading is not affiliated with Oracle Corporation.

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uncle_optics@yahoo.com
[email protected]
12/4/2012 | 7:54:31 PM
re: Report Details Component Hot Spots
http://www.lightreading.com/do...

Hey folks, didn't you just do this story less than two weeks ago??

Subscription numbers not there or something?
^Eagle^
^Eagle^
12/4/2012 | 7:54:29 PM
re: Report Details Component Hot Spots
Lightreading. Please do a little bit more research on your articles before posting!

You have left off the largest (most market share) interleaver vendor out there!! Chorum!

You also leave off several tunable vendors for both tunable sources and tunable filters.

Finally, you don't even bother to list the AWG vendors. a list of vendors of AWG's along with relative market share including volumes and revenue would be most helpful.

Finally, I would debate your assertion that AWG's dominate the filter business due to low insertion loss over other solutions like thin film dialectric filters.

Most of the successful DWDM platforms today do NOT use AWG's! They use thin films precisely because until recently, you could not get the kind of performance from AWG's that you could with Thin film filters: including flat top passband, deep isolation, low noise floor, and low insertion loss.

That is begginning to change...but still thin films dominate the mux/demux business in DWDM for both long haul and metro.

AWG's are the future not currently dominate...but will dominate future as their performance improves.

sailboat
Milano
Milano
12/4/2012 | 7:54:27 PM
re: Report Details Component Hot Spots
This article is self-promotion for LRGs sister publication that obviously needs some help!

I agree that Chorum should be on the list, however placing them at #1 market share is incorrect. Avanex has the top market share, Chorum is #2 and JDS #3 G unless you have evidence to the contrary! IGm expecting Oplink and ITF to emerge quickly in the lead group. In addition, to make the news some hard numbers should be provided, such as the market size of interleavers and the growth rate.

As far as AWG, weGve had enough of RHK missing the boat last year, obviously TFF is towering over the market. For the AWG companies who will survive the next months, the future should favor them. I donGt believe AWG is GǣhotGǥ this year.

M.
lbjcats
lbjcats
12/4/2012 | 7:54:20 PM
re: Report Details Component Hot Spots
Hi, Board Members,

I am very impressed with your messages and your obviously expertise in the industry. Just curious, with all that knowledge, have all of you been able to make some $ in this awful market? If not, novices like me should give up! I've lost a fortune on some of these optic companies over the past two years. :(

Best,
Linda
questionable
questionable
12/4/2012 | 7:54:16 PM
re: Report Details Component Hot Spots
What are interleavers? I looked it up in the optical glossary but didn't find it.

Is that when you groom two different protocols (e.g. ATM and Ethernet) onto the same wavelength?

Thanks
=======
=======
12/4/2012 | 7:54:15 PM
re: Report Details Component Hot Spots


Hi, Board Members,

I am very impressed with your messages and your obviously expertise in the industry. Just curious, with all that knowledge, have all of you been able to make some $ in this awful market? If not, novices like me should give up! I've lost a fortune on some of these optic companies over the past two years. :(

Best,
Linda


Dear Linda:
We just like to loose money in very elegant and intelligent ways. Money is just not that important to us. We really prefer to fight like dogs over the difference between GMPLS and MPLS, hurl abuse at the owners of this site, and post nasty comments about one another.
Hope you enjoy your stay.

fiber_flip
fiber_flip
12/4/2012 | 7:54:15 PM
re: Report Details Component Hot Spots
Interleavers are passive optical companents which can take 2 combs of (say) 100Ghz spaced waves and combine them to be spaced at 50 Ghz.

For example, there are two input combs - the first one at ITU numbers 20,21, 22, 23 etc. and the second at 20.5 21.5, 22.5 etc. the output is a single comb of waves comprising ITU 20, 20.5, 21, 21.5 etc.

Interleavers could also be used for conversion for 200 Ghz to 100 Ghz spacing, from 50 Ghz to 25 Ghz etc.

questionable
questionable
12/4/2012 | 7:53:51 PM
re: Report Details Component Hot Spots
Fiber_Flip Thanks!

I can see why interleavers would be so important.
realoptics
realoptics
12/4/2012 | 7:53:37 PM
re: Report Details Component Hot Spots
Interleaver is not going to be the hot thing since once grating and AWG based mux/demux get mature, the interleavers will cease the reason to exist. The evidence is that grating based athermal 40, 80 channel mux/demux will directly separated the 40 0r 80 channels with low cost/channel thus elminate the need of putting interleaver in between, interleaver is an intermidiate solution only for the guys who do not know how to separate high channel numbers directly.

Also, Avanex is certainly NOT the leader in interleaver, what they have shown in NFOEC is sucks! All other names you mentioned do not even have that working, Chorum is the best in term of both devices and IPs.

Furthermore, guys, it does not matter who is the leader in the interleaver, which will certainly cease existance in less than 2 years time completely, it will not be hot any longer.

By the way, optics is something not easy to predict, we consider 5-8 universities in the U.S. have the best optics programs(you know the names) in the world, and some others are in Canada and China(totally less than 4), if the analysts were not taught in one of those institutions, it is hard for them to do a super job.

Milano
Milano
12/4/2012 | 7:53:05 PM
re: Report Details Component Hot Spots
A few comments:

"Interleaver is not going to be the hot thing since once grating and AWG based mux/demux get mature, the interleavers will cease the reason to exist. The evidence is that grating based athermal 40, 80 channel mux/demux will directly separated the 40 0r 80 channels with low cost/channel thus elminate the need of putting interleaver in between".

That's the beauty of interleavers. It's usually the technology that allows to enter a new channel spacing while the other ones are catching up. Once AWG (or TFF) really does the job at 50 GHz, interleavers will make money (and profits) selling 25 GHz solutions.

Athermal gratings? You gotta be joking. Stop reading your own marketing material. It's nowhere close significant market acceptance. NEL is showing it, that's about it.


"Also, Avanex is certainly NOT the leader in interleaver, what they have shown in NFOEC is sucks! All other names you mentioned do not even have that working, Chorum is the best in term of both devices and IPs."

From a market perspective, because of its strength in the Nortel account, Avanex has #1 market share, at least for the first half of the year. Chorum is second source at Nortel. Their sales to Tycom have dropped because of overstock there. They don't have significant business wins elsewhere.

As far as predicting optics market, I know it's not easy. That's why we charge big bucks for reports that provide valuable information. And that's why I won't pay $899 for a report that does not.

M.


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