This year was supposed to be the big one for 400G. Switches based on12.8T ASICs with a capacity of 32 x 400G ports were released in 2019, potentially enabling significant deployments of 400G in the data center in 2020. Service providers have been experimenting with 200G, 400G and 600G modules for about seven years, but these earlier implementations were often proprietary and deployment was measured in small numbers of modules/boards. Last year was the first time that 400G really hit the mainstream.
400G in the post-Covid era: In fact, the 400G market in 2020 seems to have been mixed. Covid-19 quickly resulted in bandwidth hunger from locked-down populations trying to work at home and entertain themselves at home. This put considerable pressure on networks worldwide. CIR’s contacts at transceiver suppliers tell us that they are having a hard time keeping up with the transceiver demand from hyperscale data centers and carriers .
This presumably includes a demand for 400G transceivers, which, during 2020, will go mostly to the likes of Alibaba Cloud, IBM Cloud, Microsoft Azure, Amazon Web Services, Google Cloud, Oracle, Salesforce and SAP. Nonetheless, we strongly suspect that many of the plans for 400G outside of largest data centers have been delayed as engineers and installers at many facilities find themselves in lock down.
If there is going to be a 400G boom we think it will now occur in the 2021/2022. There will be a big pent-up demand for 400G transceivers once the pandemic crisis is sufficiently mitigated. So in 2021 we anticipate enterprise data centers, sized below the hyperscale, to take off in terms of their 400G purchases.
The role of AOCs in 400G deployment: According to CIR’s latest report, “Active Optical Cables: Market Forecasts — 2020 to 2024,” about 90,000 x 400G Active Optical Cables (AOCs) will be shipped in 2020 (See Exhibit below). If this sounds like a large number consider that the number of 100G AOCs shipped worldwide in 2020 is about 10 times this number.