XFP was expected to end up cheaper than Xenpak, but not this early. The trend is particularly surprising, given that Xenpak started out cheaper and has more than a year's headstart in terms of shipments.
The price shift could accelerate the already rapid descent of 10-Gbit/s Ethernet equipment prices. At least one company is taking advantage right away; Foundry Networks Inc. (Nasdaq: FDRY) chose XFP rather than Xenpak for the recently announced X series of routers, citing price as the reason (see 10-GigE Price Drops Continue).
"You'll probably see the XFP [prices] drop faster than the Xenpak," says Bob Schiff, director of marketing for Foundry's enterprise unit. "It's just a lower-cost design, and [XFP] will be the ones shipping in volume in 2005 and 2006."
Force10 Networks Inc. has seen the changes, too. The company isn't shipping XFP interfaces yet, but it's been shopping.
"From late Q3 of last year until now, I've seen a good 20 percent erosion of prices," says Michael Laudon, director of hardware engineering for Force10.
XFP is one of several multisource agreements (MSAs) for 10-Gbit/s Ethernet transponders and transceivers, a group including the Xenpak, XPAK, and X2 MSAs. Those three split a 10-Gbit/s electrical signal into four lanes of 3.125 Gbit/s, making it more palatable to today's chips. The XFP is more advanced, using a serial 10-Gbit/s electrical interface. It's smaller, and module vendors assume it will eventually replace the other options. (See 10-GigE Transponders: Update.)
XFP was expected to get a fast start due to interest from storage area networking (SAN) vendors. But the emergence of a 4-Gbit/s SAN generation put many 10-Gbit/s plans on rain delay (see XFP No Longer a BFD).
Even as prices fall, equipment vendors can't immediately switch to XFP, because it takes a board redesign to replace a Xenpak or X2 module. Those redesigns could get sped up or released to market earlier than expected, but it's still going to take some time.
Still, competition is fierce enough for prices to fall. "It is somewhat surprising because there isn't that much volume yet," Laudon says. "There are just so many vendors in the market."
Vendors shipping or planning to ship XFP modules include:
- Agilent Technologies Inc. (NYSE: A)
- Avanex Corp. (Nasdaq: AVNX)
- Bookham Technology plc (Nasdaq: BKHM; London: BHM)
- E2O Communications Inc.
- Finisar Corp. (Nasdaq: FNSR)
- Infineon Technologies AG (NYSE/Frankfurt: IFX)
- Intel Corp. (Nasdaq: INTC)
- JDS Uniphase Corp. (Nasdaq: JDSU; Toronto: JDU)
- LuminentOIC Inc.
- MergeOptics GmbH
- Network Elements Inc.
- Opnext Inc.
- Picolight Inc.
- Sumitomo Electric Industries Ltd.
- TriQuint Semiconductor Inc. (Nasdaq: TQNT)
- Tyco Electronics
XFP does require an extra $100 serializer/deserializer (SerDes) chip, which splits the 10-Gbit/s stream into four lanes of 3.125 Gbit/s, a more manageable speed for linecard electronics. But prices of that chip are declining as well.
Looking at the metro market, the 40km XFP module probably won't come as cheaply. "I don't think there'll be as much price erosion, because the volumes will be significantly lower," Laudon says.
The sharp decline in XFP module prices might have taken some people by suprise, but it was forecast by Heavy Reading, Light Reading's paid research division, in a recent report entitled "10-Gbit/s Ethernet Components: A Heavy Reading Competitive Analysis." The 63-page report delivers a complete analysis of transponder modules and PHY devices from 44 components vendors, covering nearly 200 different products. All the main 10GE transponder form factors are covered, including 300-pin, Xenpak, XPAK, X2, and XFP. For more information, click here.
— Craig Matsumoto, Senior Editor, Light Reading
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