Revenue Opportunities for Optical Interconnects: Market and Technology Forecast – 2013-2020-Vol. I


Much has happened to spur opportunities in the optical interconnect (OIC) business in the past couple of years. Demand on the data centers and local networks has accelerated as entirely new kinds of data traffic such as 3D video, big data and social networking has begun to predominate. At the same time we have seen the rise of cloud computing, a networking architecture that fundamentally changes the way that computing is done.

Some observers believe that the current generation of I/O technology isnt up to coping with this change and on its current roadmap is likely to find itself squeezed increasingly by the new kinds of traffic and new ways of doing networking. Conventional I/O technology development appears to be lagging traffic growth and to make matters worse, power consumption of traditional copper I/O is inconsistent with the goal of green computing and saving energy costs in data centers.

CIR believes that these trends will spur business for manufacturers of OICs and related products, who now face large addressable markets -- corporate servers and large routers -- where once they dealt only with niches. This report is designed to provide guidance to firms that are designing market strategies for future OIC markets, whether they be optical module and connector makers, fiber manufacturers or computing and telecommunications firms.

In addition, to showing how the markets for OICs will evolve, this report looks at the daunting challenges facing optical interconnection; primarily providing cost-effective optical technology in markets that are used to paying only minimal amounts for metal connectivity. Also included in the report is an analysis of the evolution of OIC technology including the role of AOCs in the optical interconnect space and the eventual shift to waveguide backplanes and other advanced optical technologies. In its granular eight-year forecasts, this report also quantifies how much those opportunities will be worth.

Table of Contents

Executive Summary

E.1 Summary of Current Market Drivers and Challenges for Optical Interconnection
E.1.1 Potential End-User Base for Optical Interconnection: Opportunities Expanding Rapidly
E.1.2 The Market for Optical Interconnection is About to Boom: 40 Gbps and “Big Data
E.1.3 Board-Level Opportunities: Optical Engine
E.1.4 The End of Copper—Not Yet
E.2 Six Firms to Watch in the Optical Interconnect Space
E.2.1 Avago Technologies
E.2.2 Finisar
E.2.3 Kotura/Mellanox
E.2.4 Luxtera
E.2.5 Reflex Photonics
E.2.6 Samtec
E.3 Summary of Forecasts

Chapter One: Introduction

1.1 Background to this Report
1.1.1 The Market Bifurcates: Why Two Volumes
1.1.2 Three New Drivers for Optical Interconnects: Power, Security and Content
1.1.3 The Danger of Market Overshoot: Technology Change Moving Slowly
1.2 Objectives of this Report
1.3 Methodology and Information Sources for this Report
1.4 Plan of this Report

Chapter Two: Current and Future Markets for Optical Interconnects

2.1 Three Key Data Center and HPC Trends Shaping the Market for Optical Interconnection
2.2 Bandwidth, Processor Speeds and the Need for Optical Interconnects: Moore’s Law and Parallelism
2.2.1 Moore’s Law and the Future of Optical Interconnection
2.3 The Next Data Rate Surge: Coming Soon at Your Data Center
2.4 More CPUs and More Racks
2.4.1 Optical Interconnection in HPC and Exascale Computing
2.4.2 Interconnection’s Coming Big Data Boom
2.4.3 Thoughts on Clouds and Interconnection
2.5 How Server and HPC I/O Can Drive the Optical Interconnect Market
2.6 Equipment-Level Opportunities for Optical Interconnects
2.6.1 VSR Telecom and Optical Interconnection
2.6.2 Optical Interconnection and LANs
2.6.3 Optical Interconnects in Server Clusters
2.6.4 Storage and Interconnection
2.6.5 Optical Interconnect Needs for Rack-Based Systems
2.7 Board-Level Opportunities for Optical Interconnects
2.7.1 Board-to-Board Interconnection
2.8 Key Points Made in the Chapter

Chapter Three: Optical Interconnect Products, MSAs and Technologies

3.1 High-Performance Copper Interconnects: End of the Road?
3.1.1 Power Consumption: Copper Killer
3.1.2 Physical Factors: Fabrication and Termination
3.1.3 Copper Cost Challenges
3.1.4 Channel Density
3.2 Products, MSAs and Standards for Optical Interconnection
3.3 The Evolution to Optical Interconnection
3.3.1 Optical Ethernet: Onwards to 400 Gbps and the “Terapipe”
3.3.2 Fibre Channel: HPC Right from the Start
3.3.3 InfiniBand
3.3.4 Optical Interconnection and PCI Express
3.3.5 Optical Backplanes, Motherboards and Optical Interconnection
3.4 Optical Interconnection Products
3.4.1 Pre-Terminated Optical Assemblies and the MPO Connector
3.4.2 MPO-based Parallel Optics
3.4.3 Fiber-Optic Jumpers
3.4.4 Firms Offering Cable, Fiber and Connectors for Optical Interconnects
3.5 AOCs as Optical Interconnects
3.5.1 AOCs as CX4 Replacement
3.5.2 10GigE and the Evolution of AOC: Developments Since 2011
3.5.3 40/100-Gbps Active Optical Cabling Products: Developments Since 2011
3.5.4 AOCs as QSFP Replacement
3.6 Optical Engines and Optical Interconnection
3.7 Enabling Technologies for Optical Interconnection
3.7.1 Optical Integration
3.7.2 Silicon Photonics
3.7.3 Novel Laser Types: Silicon and Quantum Dot Lasers
3.8 Key Points Made in the Chapter

Chapter Four: Eight-Year Forecasts of Optical Interconnection Markets

4.1 Forecasting Methodology
4.1.1 Sources of Data
4.1.2 Forecasts from Experience
4.1.3 Can this be the End of Copper?
4.1.4 Value-Chain Considerations
4.2 Alternative Scenarios
4.2.1 Economic and Demographic Possibilities
4.2.2 Impact of the Future of Video
4.2.3 Overestimating Optics
4.3 Eight-Year Forecast of Rack-based Optical Interconnection by Product Type
4.3.1 Network Topology Considerations
4.3.2 What is the Size of the Addressable Market of Rack-based Optical Interconnects?
4.3.3 Penetration of Fiber Optics in Rack-Based Interconnection
4.3.4 Forecast of Rack-Based Interconnection by Connector Type: Fiber Optic Connectors and AOCs
4.3.5 Forecast of Rack-Based Interconnection by Fiber Type
4.4 Forecast of Board-based Optical Interconnection by Product Type
4.4.1 Estimate of Addressable Market Optical Board-to-Board Interconnection
4.4.2 Forecast of Optical Board-to-Board Optical Interconnection Markets: 2013 to 2022
4.5 Summary of Forecasts for Optical Interconnection

Acronyms and Abbreviations Used in this Report

List of Exhibits

Exhibit E-1: Summary of Rack-Based and Board-to-Board Optical Interconnect Shipments: Revenue Generation ($Millions)
Exhibit 1-1: Optical Interconnection Components
Exhibit 2-1: Impact of Semiconductor Industry Developments on Rack-Based/Board-to-Board Optical Interconnection
Exhibit 2-2: Impact of Demand Side Trends on the Need for Optical Interconnection
Exhibit 2-3: Equipment Level Trends in Optical Interconnection
Exhibit 3-1: Factors Influencing the Use of Optical Interconnection Products at the Rack and Board-to-Board Level
Exhibit 3-2: Evolution of Optical Ethernet for Interconnection
Exhibit 3-3: InfiniBand Formats and Data Rates
Exhibit 3-4: Selected Optical Engine Firms
Exhibit 3-5: Opportunities for Optical Integration in High-Speed Networks
Exhibit 4-1: Size of Data Center by Number of Racks
Exhibit 4-2: Addressable Market for Rack-Based Interconnection in the Data Center, 2013-2021
Exhibit 4-3: Fiber Penetration of Rack-Based Interconnection in the Data Center, 2013-2021
Exhibit 4-4: Breakout of Rack-Based Fiber Interconnection by AOC and Traditional Interconnects, 2013-2021 (Millions)
Exhibit 4-5: Break Out of Rack-Based Fiber Interconnection by AOC and Traditional Interconnects, by Type of Connector 2013-2021 (Millions)
Exhibit 4-6: Market for MPO-to-MPO Interconnects
Exhibit 4-7: Market for MPO-to-LC Breakout Interconnects
Exhibit 4-8: Market for LC-to-LC Jumpers
Exhibit 4-9: Rack-Based Interconnect Market: Revenue Generation
Exhibit 4-10: Estimate of Market for Board-to-Board Optical Interconnects
Exhibit 4-11: Board-to-Board Optical Interconnect Shipments: 2013 to 2021
Exhibit 4-12: Summary of Rack-Based and Board-to-Board Optical Interconnect Shipments: Revenue Generation ($ Millions)

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