Challenges, progress & uncertainties facing the optical component industry

In recent years the industry has moved from direct detection to coherent transmission and has alighted on a flexible ROADM architecture. The result is a new level in optical networking sophistication. OFC/NFOEC 2012 will showcase the progress in these and other areas of industry consensus as well as shining a spotlight on issues less clear.

Optical component players may be forgiven for the odd envious glance towards the semiconductor industry and its well-defined industry dynamics. 

The semiconductor industry has Moore’s Law that drives technological progress and the economics of chip-making. It also experiences semiconductor cycles - regular industry corrections caused by overcapacity and excess inventory. The semiconductor industry certainly has its challenges but it is well drilled in what to expect.

Optical challenges

The optical industry experienced its own version of a semiconductor cycle in 2010-11 - strong growth in 2010 followed by a correction in 2011. But such market dynamics are irregular and optical has no Moore's Law. 

Optical players must therefore work harder to develop components to meet the rapid traffic growth while achieving cost efficiencies, denser designs and power savings. 

Such efficiencies are even more important as the marketplace becomes more complex due to changes in the industry layers above components. The added applications layer above networks was highlighted in the OFC/NFOEC 2012 news analysis by Ovum’s Karen Liu. The analyst also pointed out that operators’ revenues and capex growth rates are set to halve in the years till 2017 compared to 2006-2010. 

Such is the challenging backdrop facing optical component players.

Consensus

Coherent has become the defacto standard for long-haul high-speed transmission. Optical system vendors have largely launched their 100Gbps systems and have set their design engineers on the next challenge: addressing designs for line rates beyond 100Gbps. 

Infinera detailed its 500Gbps super-channel photonic integrated circuit last year. At OFC/NFOEC it will be interesting to learn how other equipment makers are tackling such designs and what activity and requests optical component vendors are seeing regarding the next line rates after 100Gbps.

Meanwhile new chip designs for transport and switching at 100Gbps are expected at the show. AppliedMicro is sampling its gearbox chip that supports 100 Gigabit Ethernet and OTU4 optical interfaces. More announcements should be expected regarding merchant 100Gbps digital signal processing ASIC designs.

An architectural consensus for wavelength-selective switches (WSSes) - the key building block of ROADMs - are taking shape with the industry consolidating on a route-and-select architecture, according to analysts. 

Gridless - the ROADM attribute that supports differing spectral widths expected for line rates above 100Gbps - is a key characteristic that WSSes must support, resulting in more vendors announcing liquid crystal on silicon designs.

Client-side 40 and 100 Gigabit Ethernet (GbE) interfaces have a clearer module roadmap than line-side transmission. After the CFP comes the CFP2 and CFP4 which promise denser interfaces and Terabit capacity blades. Module form factors such as the QSFP+ at 40GbE and in time 100GbE CFP4s require integrated photonic designs. This is a development to watch for at the show.

Others areas to note include tunable-laser XFPs and even tunable SFP+, work on which has already been announced by JDS Uniphase. 

Lastly, short-link interfaces and in particular optical engines is another important segment that ultimately promises new system designs and the market opportunity that will unleash silicon photonics.

Optical engines can simplify high-speed backplane designs and printed circuit board electronics. Electrical interfaces moving to 25Gbps is seen as the threshold trigger when switch makers decide whether to move their next designs to an optical backplane. 

The Optical Internetworking Forum will have a Physical and Link Layer (PLL) demonstration to showcase interoperability of the Forum’s Common Electrical Interface (CEI) 28Gbps Very Short Reach (VSR) chip-to-module electrical interfaces, as well as a demonstration of the CEI-25G-LR backplane interface.

Companies participating in the interop include Altera, Amphenol, Fujitsu Optical Components, Gennum, IBM, Inphi, Luxtera, Molex, TE Connectivity and Xilinx.

Altera has already unveiled a FGPA prototype that co-packages 12x10Gbps transmitter and receiver optical engines alongside its FPGA.

Uncertainties

OFC/NFOEC 2012 also provides an opportunity to assess progress in sectors and technology where there is less clarity. Two sectors of note are next-generation PON and the 100Gbps direct-detect market. 

For next-generation PON, several ideas are being pursued, faster extensions of existing PON schemes such as a 40Gbps version of the existing time devision multiplexing PON schemes, 40G PON based on hybrid WDM and TDM schemes, WDM-PON and even ultra dense WDM-PON and OFDM-based PON schemes. 

The upcoming show will not answer what the likely schemes will be but will provide an opportunity to test what the latest thinking is.

The same applies for 100 Gigabit direct detection.

There are significant cost advantages to this approach and there is an opportunity for the technology in the metro and for data centre connectivity. But so far announcements have been limited and operators are still to fully assess the technology. Further announcements at OFC/NFOEC will highlight the progress being made here.

The article has been written as a news analysis published by the organisers before this year's OFC/NFOEC event.