Ayar Labs is continuing the long, storied tradition in telecom of replacing copper wires with fiber optics and using light instead of electricity to transmit data. The difference is that Ayar Labs is replacing copper connections at the chip level, speeding up connections between processors to allow for faster data processing.
"We bring [fiber] all the way into the host ASIC – I mean, you name it, whatever semiconductor it is, whether it's a CPU or GPU, FPGA, a memory, network, switch, custom AI accelerator – we're agnostic, we bring it all the way in," said Hugo Saleh, Ayar Labs' SVP, Commercial Operations.
Last week, the company said that it raised a $130 million Series C funding round. The Santa Clara, California-based company's chip-to-chip optical connectivity products – low power optical-based interconnect "chiplets" and lasers that carry data between a computing system's chips – could be used in a wide range of applications and industries.
However, since this indeed may be a multibillion-dollar opportunity that could shift the future of computing and networking as we know it, several companies are attempting some form of co-packaged optics (CPO) with the end goal of revolutionizing one or several industries. Some include Broadcom, Cisco, Intel and Ranovus.
Advanced optics use inside the data center has been an extremely hot topic as cloud computing giants are weighing when and how to change their network architectures to allow for a greater volume of intensive AI and machine learning workloads, without driving up costs too quickly.
Meta (Facebook), for example, is using CPO where it can to reduce power consumption and increase port density. "It is focused on flattening its network as much as possible to allow the fastest server-to-server communication," according to an April report by Lisa Huff, Omdia's senior principal analyst covering optical components. Huff's report listed dozens of companies working in various stages of the CPO ecosystem.
Ayar Labs' new funding announcement comes at a really interesting time because the industry is not all marching in lock-step here; some cloud providers and optical components manufacturers have been hesitant to dive in to a new opto-electronic ecosystem. "While optical components (OC) suppliers should keep abreast of CPO, they should also look for feasible solutions to extend the life of pluggable modules beyond 800G," Huff wrote in her report, "2022 Trends to Watch: Datacom optical components."
With its new funding, Ayar Labs has signaled that the hype might soon give way to real products produced in some significant volume. A few firms that have already been doing work in CPO themselves or have previously acquired companies in the space, are among the participants in Ayar Labs' latest or previous funding rounds: Those companies include Hewlett Packard Enterprise (HPE), NVIDIA, Applied Ventures LLC, GlobalFoundries, Intel Capital, Lockheed Martin Ventures, as well as a handful of venture capitalists.
With the new funds, Ayar Labs is ramping production and seeking more strategic collaborations, similar to the ones it recently announced with optical networking suppliers Lumentum and Macom. Also, the chiplets used in Ayar Labs' products are being made by GlobalFoundries, using its new GF Fotonix platform, another nod to the company's technology promise and its market backing.
The 5G bottleneck
In the telecom space, removing bandwidth bottlenecks inside system architectures for 5G radios, cloud computing data centers and satellite systems are among the company's priorities, Saleh said. Some of the copper-wired electrical interfaces in 5G radios could be changed to fiber-optic connections, greatly reducing the amount of electromagnetic interference in and around the device.
What's more, Ayar Labs said that it is doing something far more disruptive than a single-product replacement for a single market. "What we're doing is displacing 40 years of electronic signaling coming out of every single package, across the spectrum," said Saleh. "If you're talking to cellphones, if you're talking servers, if you're talking satellites – everything speaks electrical signaling and we see that all moving optical."
Ayar Labs is disruptive, but it's also a proprietary solution tackling a market where the cost curve inevitably pulls vendors toward commodity products and standardized interfaces. At this point, that's not a condemnation of Ayar Labs – other companies working on CPO solutions are also touting proprietary components. "Therefore, Omdia still sees limited opportunities for CPO in ICP [Internet Content Provider] data centers within the next five years. Beyond 2026, perhaps the potential of CPO will come to fruition," Huff wrote in her report on the CPO market.
But, again, Ayar Labs' funding might be a sign that the market interest is expanding and that the time to market is shrinking. According to Saleh, using optical interconnect between chips can improve bandwidth density, throughput and latency from 100 to 1000 times what current electrical interconnect can handle, while only using about one-tenth of the power. That's a very attractive proposition for companies depending on AI-powered applications and high performance computing.
In February, Ayar Labs and HPE announced a collaboration designed to improve future versions of HPE's Slingshot interconnect switching systems. In that announcement, the companies said that the use of optical I/O would allow them to "design next-generation high-performance networking solutions and novel disaggregated system architectures that are critical for increased flexibility, efficiency, performance, and throughput to support data-intensive demands of future workloads."
With funding now in hand, Ayar Labs said that it has started shipping to at least one customer and the company expects to be moving thousands of units by the end of the year.
- GF's new platform takes aim at exploding data volumes, power consumption
- Lumentum, Ayar Labs collaborate on components (press release)
- Ayar Labs raises $130M in Series C funding (press release)
- Microsoft & Facebook Launch Co-Packaged Optics Collaboration (press release)