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When CIR published a report on the optical interconnect market in 2010, the goal of the report at the time was to provide a full analysis of the entire optical interconnect business.  In this year’s CIR analysis we are covering the market in two reports, focusing primarily on interconnects in the chip-to-chip and on-chip sector in this volume (Volume II).  In the previously published volume (Volume I), we covered the rack-based and board-to-board part of the optical interconnect market.

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Big Data and the Future of Optical Interconnection

This research note is based on CIR’s new report, “Revenue Opportunities for Optical Interconnects: Market and Technology Forecast – 2013-2020. Vol. I Board-to-Board and Rack-Based”

CIR’s latest forecast for sales of optical interconnection devices used at the rack level and for board-to-board interconnection remains bullish. We are anticipating revenues doubling from $1.1 million to $2.2 million between 2013 and 2018. Several factors are leading to this growth.

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The Optical Interconnect Market Bifurcates

The reason why we have chosen to split this report into two volumes is that, while the big drivers are the same throughout the optical interconnect market, optical interconnect solutions are increasingly of two kinds considered from the supply side of the equation:

• Optical assemblies for macro level interconnection at the rack-to-rack and board to board level. Roughly speaking this means interconnection at above 50 cm and up to a 1 km; although often a few meters. The point here though is not so much the range as the technology. The optical assemblies that we are talking about here are not—by the standards of today—all that technologically sophisticated and in some ways they are not all that different from the optical data links that could be easily bought in the early 1980s.

• Photonic chips and waveguides that are suitable for chip-to-chip and some on-chip applications. This is a research area that has been explored for the past 20 years and still has yet to see much commercialization. It is much more of a technology and materials play than the “optical assemblies” sector and this is reflected in the firms and research organizations involved in this part of the business. This part of the optical interconnect business is covered in the second volume associated with this report.

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Why the Prospects for AOCs Keep Growing

It is time for a careful examination of the prospects for AOCs over the next few years. And the big question here is whether the firms that are now investing heavily in the AOC space are actually making a wise investment or are they simply chasing after pie in the sky; a now traditional sport in the optical networking space.

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