ECOC 2011: Products and market trends
There were several noteworthy announcements at the European Conference on Optical Communications (ECOC) held in Geneva in September. Gazettabyte spoke to Finisar, Oclaro and Opnext about their ECOC announcements and the associated market trends.
100 Gig module
Opnext announced the first 100 Gigabit-per-second (Gbps) transponder at ECOC, a much anticipated industry development.
"Quite a few system vendors .... are looking at 'make-versus-buy' for the next-generation [of 100 Gig]."
Ross Saunders, Opnext
The OTM-100 is a dual-polarisation, quadrature phase-shift keying (DP-QPSK) coherent design that fits into a 5x7-inch module and meets the Optical Internetworking Forum's (OIF) multi-source agreement (MSA). The module's coherent receiver uses a digital signal processor (DSP) developed by NTT Electronics.
"At the moment we are going through the bring-up in the lab," says Ross Saunders, general manager, next-gen transport for Opnext Subsystems.
According to Opnext, system vendors that have their own 100Gbps coherent designs are also interested in the 100Gbps module.
"There are a few developing in-house [100Gbps designs] that are not interested in going for the module solution," says Saunders. "But there is another camp - quite a few system vendors - who have their first-generation solution that are looking at 'make-versus-buy' for the next-generation."
System vendors' first-generation 100Gbps designs use hard-decision forward error correction (FEC). But customers want a 100Gbps design with a reach that gets close to matching that of 10Gbps, 40Gbps DPSK and 40Gbps coherent designs, says Opnext.
"There is demand to go to the next-generation with its higher overhead and soft-decision FEC," says Saunders. "That [soft-decision FEC] buys another 2-3dB of performance so you don't need as many regeneration stages." Translated into distances, the reach using soft-decision FEC is 1500-1600km rather than 800-900km, says Saunders.
Opnext expects to deliver samples to lead customers before the year end.
Meanwhile, Oclaro is also developing a 100Gbps coherent module. "It is on track and we expect to ship in early 2012," says Per Hansen, vice president of product marketing, optical networks solutions at Oclaro.
100 Gig receiver
Oclaro announced an integrated 100Gbps coherent receiver at ECOC.
The company claims the device takes less than half the board area as defined by the OIF. "Board space is at a premium on line cards," says Robert Blum, director of product marketing for Oclaro's photonic components. "If you can increase functionality, that translates to lower cost."
100 Gig indium phosphide integrated receiver Source: OclaroThe device has two inputs and four outputs. The inputs are the received 100Gbps optical signal and the local oscillator and the outputs are from the four balanced detectors.
"The entire 90-degree hybrid mixing and the photo detection are all done in an indium phosphide single chip," says Blum.
40 Gig modules
Oclaro also announced it is shipping in volume its 40Gbps coherent transponder.
"There is a lot of interest from equipment vendors and service providers to use coherent in their networks," says Hansen "Coherent has advantages in the way it can overcome impairments."
Hansen says coherent will be used in the majority of new network deployments in future: "If you are deploying a network that is geared to 40Gbps and above, people will most likely deploy an all-coherent solution."
One reason why coherent is favoured is that the same technology can be scaled to 100Gbps, 400Gbps and even a Terabit.
Coherent technology, whose DSP is used for dispersion compensation, is also suited for mesh networks where switching wavelengths occurs. The coherent technology can compensate when it encounters new dispersion conditions following the switching.
In contrast 40Gbps direct-detection modules interest vendors for use in existing networks alongside 2.5Gbps and 10Gbps wavelengths, says Oclaro.
For networks geared to 40Gbps and above, people will most likely deploy an all-coherent solution
Per Hansen, Oclaro
"They can have very high power which can make it difficult for a new [high-speed] channel to live next to them but direct-detection modules are robust for those types of applications," says Hansen. "Where you will see people upgrading their existing networks, they will use DPSK or DQPSK transponders."
But Oclaro says that the split is not that clear-cut: 40Gbps coherent for new builds and direct-detection schemes when used alongside existing 10Gbps wavelengths. "There is a lot of variability in both of these approaches such that you can tailor them to different applications," says Hansen. "In the end, what it will come down to is what the customer is happy with and the price points, more than fundamental technology capabilities."
40G client-side interfaces
Finisar demonstrated at ECOC a serial 40Gbps CFP module that meets the 2km 40GBASE-FR standard.
"This will be the first 40 Gig serial module that is in a pluggable form factor," says Rafik Ward, vice president of marketing at Finisar. Indeed Finisar's CFP is a tri-rate design that also supports the ITU-T OC-768 SONET/SDH very short reach (VSR) and OTU3 standards.
The FR interface is the IEEE's 40 Gigabit Ethernet equivalent of the existing OC-768 VSR interface. The original 300pin VSR interface has a 16-channel electrical interface, each operating at 2.5Gbps, while the CFP module uses 10Gbps electrical channels.
IP routers can now be connected to DWDM platforms using the pluggable module, says Finisar. The pluggable will also enable system vendors to design denser line cards with two or even four CFP interfaces, as well as the option of changing the CFP to support other standards as required.
The tri-rate FR pluggable module's power consumption will be below 8W, says Finisar, which is shipping samples to customers.
Meanwhile, Opnext has announced it is sampling its 40GBASE-LR4, the 10km 40 Gigabit Ethernet interface, in a QSFP module. "It will be readily available by the end of the year," says Jon Anderson, director of technology programme at Opnext.
"The 40GBASE-LR4 [QSFP] will be readily available by the end of the year"
Jon Anderson, Opnext
Tunable laser XFP
Opnext and Oclaro have both announced 10Gbps tunable XFPs at ECOC. Having two new suppliers of tunable XFPs joining JDS Uniphase will increase market competition and reduce the price of the tunable pluggable.
"It really is a replacement for 300-pin transponders," says Blum. "You can now migrate 10Gbps links to a pluggable form factor."
Oclaro's tunable XFP is released for production. Opnext says its tunable XFP will be in volume production by early 2012.
ROADMs get 1x20 WSS
Finisar announced a 1x20 high-port count wavelength selective switch (WSS). The WSS supports a flexible spectrum grid that allows the channel width to be varied in increments of 12.5GHz, enabling future line rates above 100Gbps to be supported.
"This [1x20 WSS] has the possibility to enable some pretty interesting applications for next generation - colourless, directionless, contentionless networks," says Ward.
"This [40GBASE-FR] will be the first 40 Gig serial module that is in a pluggable form factor"
Rafik Ward, Finisar.
One common application of the 1x20 WSS is implementing a multi-degree node. The degree refers to the number of points that node branches out to in a mesh network, says Finisar. "The fundamental question is how many ports do you have in that node?" explains Ward.
For example, an 8-degree node communicates with eight other points in the mesh. With a 1x20 WSS, the architecture uses eight of the 20 as express ports - those 8 ports interfacing with other WSSs in the node - while the remaining 12 ports on that 1x20 WSS are used as add and drop ports.
"The advantage of a 1x20 WSS in this case is enabling a large number of express ports and a large number of add ports," says Ward.
A second application is for colourless or tunable multiplexing.
"One of the problems today enabling colourless ROADM operation is that typically the muxes and demuxes used are AWGs," says Ward. Having a tunable laser is all well and good but it becomes hardwired to a specific port because of the arrayed waveguide grating (AWG). "That specific port is configured for that particular wavelength," he says.
To make an 80-channel colourless design, that does not require manual intervention, four 1x20 WSSs are placed side-by-side with a 1x4 WSS connecting the four. This is a more elegant and compact than using existing 1x9 WSSs, which requires more than twice as many WSS units.
Pump lasers
Oclaro announced two 980nm pump laser products that enable more compact, lower-power amplifier designs.
"Board space is at a premium on line cards"
Robert Blum, Oclaro
One is an uncooled 980nm 500mW pump laser and the second is two 600mW pump lasers in a single package. The dual-pump laser product halves the footprint and requires a single thermo-electric cooler only.
"The power consumption is significantly lower than what it would be for two discrete pump lasers," says Blum. "The 300mW uncooled pump laser doesn't go away but for dual-stage or mid-stage optical amplifiers instead of using multiple [300mW] lasers, you can use a single package," says Blum.
GPON-on a-stick
Finisar announced a 'GPON-on-a-stick' SFP module. The result of its acquisition of Broadway Networks in 2010, the SFP-based GPON optical network unit (ONU) enables an Ethernet switch to be connected to a PON. The product is aimed at enterprises as well as large residential premises. The GPON stick complements the company's existing EPON stick.
Further information:
ECOC 2011 Market focus presentations, click here
Rapid progress in optical transport seen at ECOC 2011, Ovum's Karen Liu, click here
Finisar and Capella enter 1×20 WSS market; signals shift, Ovum's Daryl Inniss, click here
Is optical components becoming a buyer's market?
"An organisation's gross margins ride on these new products"
Daryl Inniss, Ovum Components.
The global optical component market was down 2% in the second quarter of 2011 at US $1.55 billion, according to Ovum.
The good news is that the market research company is forecasting that modest growth will resume this quarter now that the build-up in component inventory that led to the market contraction has largely been worked through.
But Ovum is warning that there are signs that the continued weak market conditions and fierce competition could lead to sharp price declines even for newer, high-valued products. "An organisation's gross margins ride on these new products," says Daryl Inniss, practice leader, Ovum Components.
Oclaro's CEO on a recent earnings call said he was being asked for price concessions on 40Gbps products. Ovum also says the ROADM and tunable laser XFPs markets are becoming more crowded and competitive.
Inniss stresses that there is no evidence that companies are cutting prices to gain an edge but while he expects volumes will grow, intense pricing pressure should now be expected.
LightCounting points out that the slowdown in sales of optical component and modules in early 2011 has been limited to products that did very well in 2010 or which had long lead times, like wavelength-selective switches for ROADMs and 40Gbps modules. It says there is little, if any, excess inventory of components accumulated across the broader market.
"The telecom transceiver market remained steady in Q1 2011, but it declined further in Q2 mostly due to lower sales of 40Gig client-side modules," says Vladimir Kozlov, CEO of LightCounting. "We expect that by the end of this year, the telecom market segment will be strong again."
Best in a decade
The second quarter market dip follows a period where the optical components industry experienced its strongest yearly growth for a decade. The market reached US $6 billion for the year ending first quarter 2011 - a first since 2001.
So long as network expansion keeps up with traffic, we are looking at sustainable growth”
Vladimir Kozlov, LightCounting
The six quarters of consecutive market growth up to the second quarter was due partly to the overall health of the telecom industry. The service provider industry - wireless and wireline - grew 6% year-on-year between 2Q10 and 1Q11, to reach $1.82 trillion. In turn, the equipment market, mainly telecom vendors but including the likes of Brocade, grew 15% to $41.4 billion.
Ovum attributes the 28% growth in optical components between 2Q10 and 1Q 2011 to strong growth in the fibre-to-the-x (FTTx) market as well as new revenues entering the market from datacom players. A third factor was optical equipment vendors over-ordering long lead-time items – such as ROADMs – to secure supply.
“ROADMS did grow nicely but if you look at wavelength-selective switches, it is not such a big market," says Kozlov. The market research firm says the wavelength-selective switch market was $280 million in 2010.
LightCounting says 10 Gigabit SFP+ optical transceivers was a market highlight in 2010, with volume shipments tripling. Ethernet SFP+ sales alone reached $180 million in 2010, and will grow to $250 million this year.
“The optical component market grew 36% in 2010, and in 2011 we’re projecting it will grow 7%,”says Inniss
But competition is intense. Finisar may be the market leader but only 4% market share separates the players in second through to sixth place, says Ovum. “It’s a very competitive market and there is no breakaway here,” says Inniss.
Another challenge is the emergence of the Chinese optical component players. The large-scale deployment of FTTx being undertaken by the main three Chinese operators means that there is a huge market opportunity for local optical component and module players. The Chinese market also accounts for half the all 40 Gigabit-per-second shipments, according to Infonetics Research.
“Looking at the western suppliers, everyone is reporting slowdowns and drops in the second quarter [of 2011],” says Kozlov. “Yet from the data we are getting from the Chinese optical component players, they grew 35% in 2010 and are on track for 30% growth this year.”
Another challenge is for firms to fund sufficient R&D. Share prices took a severe hit after the companies issued warnings about second-quarter sales. “The entire optical component market is depressed because of the localised correction,” says Inniss. “It will still grow but because it is so much smaller than 2010, capital markets are bashing the companies.”
Since the stock market is an important source of investment, it may take several years for the market to recover the share price levels at the start of 2011. “It won’t stop investment in technology but there is going to be real hard eyes on each decision that is made,” says Inniss.
The main challenge facing optical component players is not so much technical issues but more the requirement to continually decrease costs. This is not new but neither is it going away, says Inniss.
Positive outlook
Yet the analysts expect market growth to continue.
Inniss points to the growing role of optics for short-distance interfaces: “The I/O (input-output) bandwidth requirements are sufficiently high, whether it is the backplane or chip-to-chip connections, that the market realisation is that optics will play a role.”
Ovum also highlights consumer market developments such as the USB 3.0 interface which will drive the market for active optical cables. “It [the consumer market] is not going to happen tomorrow - meaning 2012 - but it is something that is coming and has the potential to transform the industry,” says Inniss.
“Companies such as Finisar and Avago [Technologies] are becoming more assertive in enforcing their intellectual rights,” says Kozlov. This is as a positive development that has been missing in the past: “Protecting your intellectual property ultimately helps you become profitable,” he says.
LightCounting also highlights the need for network investment to keep track with traffic growth. "So long as network expansion keeps up with traffic, we are looking at sustainable growth,” says Kozlov. See Plotting transceiver shipments versus traffic growth.
This article is based on a piece that appeared in the ECOC 2011 exhibition guide.
MultiPhy boosts 100 Gig direct-detection using digital signal processing
The MP1100Q chip is being aimed at two cost-conscious metro networking requirements: 100 Gigabit point-to-point links and dense wavelength-division multiplexing (DWDM) metro networks.
The MP1100Q as part of a 100 Gig CFP module design. Source: MultiPhy
The 100 Gigabit market is still in its infancy and the technology has so far been used to carry traffic across operators’ core networks. Now 100 Gigabit metro applications are emerging.
Data centre operators want short links that go beyond the IEEE-specified 10km (100GBASE-LR4) and 40km (100GBASE-ER4) reach interfaces, while enterprises are looking to 100 Gigabit-per-second (Gbps) DWDM solutions to boost the capacity and reach of their rented fibre. Existing 100Gbps coherent technologies, designed for long-haul, are too expensive and bulky for the metro.
“There is long-haul and the [IEEE] client interfaces and a huge gap in between,” says Avishay Mor, vice president of product management at MultiPhy.
It is this metro 'gap' that MultiPhy is targeting with its MQ1100Q chip. And the fabless chip company's announcement is one of several that have been made in recent weeks.
ADVA Optical Networking has launched a 100Gbps metro line card that uses a direct-detection CFP, while Transmode has detailed a 100Gbps coherent design tailored for the metro. The 10x10 MSA announced in August a 10km interface as well as a 40km WDM design alongside its existing 10x10Gbps MSA that has a 2km reach.
MultiPhy's MP1100Q IC will enable two CFP module designs: a point-to-point module to connect data centres with a reach of up to 80km, and a DWDM design for metro core and regional networks with a reach up to 800km.
"MLSE is recognised as the best solution for mitigating inter-symbol interference."
Design details
The M1100Q uses a 4x28Gbps direct-detection design, the same approach announced by ADVA Optical Networking for its 100Gbps metro card. But MultiPhy claims that the 100Gbps DWDM CFP module will squeeze the four bands that make up the 100Gbps signal into a 100GHz-wide channel rather than 200GHz, while its IC implements the maximum likelihood sequence estimation (MLSE) algorithm to achieve the 800km reach.
The four optical channels received by a CFP are converted to electrical signals using four receiver optical subassemblies (ROSAs) and sampled using the MP1100Q’s four analogue-to-digital (a/d) converters operating at 28Gbps.
The CFP design using MultiPhy’s chip need only use 10Gbps opto-electronics for the transmit and receive paths. The result is a 100Gbps module with a cost structure based on 4x10Gbps optics.
The lower bill-of-materials impacts performance, however. “When you over-drive these 10Gbps opto-electronics - on the transmit and the receive side - you create what is called inter-symbol interference," says Neal Neslusan, vice president of sales and marketing at MultiPhy.
Inter-symbol interference is an unwanted effect where the energy of a transmitted bit leaks into neighboring signals. This increases the bit-error rate and makes the detector's task harder. "The way that we get around it is using MLSE, recognised as the best solution for mitigating inter-symbol interference," says Neslusan.
Unwanted channel effects introduced by the fibre, like chromatic dispersion, also induce inter-symbol interference and are also countered by the MLSE algorithm on the MP1100Q.
MultiPhy is proposing two CFP designs for its chip. One is based on on-off-keying modulation to achieve 80km point-to-point links and which will require a 200GHz channel to accommodate the 100Gbps signal. The second uses optical duo-binary modulation to achieve the longer reach and more spectrally efficient 100GHz spacings.
The company says the resulting direct-detection CFP using its IC will cost some US $10,000 compared to an estimated $50,000 for a coherent design. In turn the 100G metro CFP’s power consumption is estimated at 24W whereas a coherent design consumes 70W.
MP1100Q samples have been with the company since June, says Mor. First samples will be with customers in the fourth quarter of this year, with general availability starting in early 2012.
If all goes to plan, first CFP module designs using the chip will appear in the second half of 2012, claims MultiPhy.