ADVA and II-VI’s coherent partnership
- ADVA and II-VI have jointly developed a 100-gigabit coherent DSP
- Both companies plan to use the 2.0-2.5W, 7nm CMOS Steelerton DSP for a 100ZR QSFP28 module
- II-VI’s ASIC design team engineered the DSP while ADVA developed the silicon photonics-based optics.
ADVA and II-VI have joined forces to define a tiny coherent digital signal processor (DSP) that fits inside a QSFP28 optical module.
The Steelerton DSP can send a 100-gigabit dense wavelength-division multiplexing (DWDM) transmission over 80-120km, carrying wireless backhaul and access traffic.
“It is backhaul of broadband, it is backhaul of mobile, and it definitely moves outdoors,” says Christoph Glingener, CTO at ADVA.
The module also serves metro networks with its 300km reach using optical amplification.
II-VI and ADVA now join such established coherent players as Ciena, Huawei, Infinera, Nokia as well as Marvell, NEL, and Acacia, now part of Cisco.
Effect Photonics announced at OFC earlier this year its coherent market entry with its acquisition of the Viasat DSP team.
Motivation
ADVA says it entered the coherent DSP market after failing to find a design suited for backhaul, a coherent market that promises highest unit volumes.
Backhaul has become even more important market for ADVA given its merger with broadband equipment maker ADTRAN.
II-VI also notes how access rates are moving from 10 to 100 gigabits.
“We were looking to develop a DSP capable to target a market that is underserved and where we can differentiate. This analysis led us to the 100ZR with a purpose-built DSP solution” says John DeMott, vice president product management, coherent and tunable product lines at II-VI.
The 100-gigabit coherent market for access contrasts with 400-gigabit coherent that uses modules such as 400ZR and 400ZR+ to connect data centres.
ADVA did consider existing suppliers’ coherent DSPs but deemed them too big and power-hungry for this application. This is what led to the II-VI partnership.
“We found a partner in II-VI that was willing to do this, but to get to the required power envelopes, we needed a 7nm DSP,” says Glingener. “And 7nm CMOS technology is not cheap.“
II-VI has a staff of mixed-signal and ASIC engineers in Germany that designed the Steelerton chip.
The two firms now have their own 100-gigabit DSP and can start developing coherent product roadmaps.
Applications
The 100ZR module will be deployed at aggregation sites.
ADVA shows how the 100ZR module is used for edge aggregation (see diagram).
Another application is 100-gigabit data-centre interconnect (DCI) for enterprises; hyperscalers require 400 gigabit and higher rates for DCI.
II-VI says the DSP is suited for access and metro applications. The 100ZR module fits a wavelength in a 50GHz channel to enable 96 DWDM wavelengths across the C-band. The 100ZR module has a maximum reach of 300km when used with amplification.
“The 22dB loss budget supports up to 80km without in-line amplification and up to 300km with in-line amplification, limited by chromatic dispersion,” says DeMott.
II-VI highlights several use-cases for the 100ZR module.
One is IP-over-DWDM, connecting edge routers to an aggregation router (see diagram) or a muxponder. The aggregated 100-gigabit wavelengths are sent to a metro router using a 400-gigabit 400ZR+ coherent module. II-VI also has 400ZR+ modules.
Two factors dictate the 100ZR module design: power consumption and the form factor.
Even a module power consumption of 10W is too high for access. Also, the DSP and optics must fit inside a QSFP28 since this is a common form factor for access equipment uplinks.
The resulting DSP has a power consumption of 2.0-2.5W and the chip is a fifth the size of other 7nm coherent DSPs. The 100ZR QSFP28 module – the DSP and optics – consumes 5.0-5.5W.
The DSP is stripped down to its essential features to achieve the power target. For example, the DSP uses one modulation format only: dual-polarisation, quadrature phase-shift keying (DP-QPSK).
“You de-feature the DSP down to a level that you can meet the power envelope, and it is not that complicated anymore,” says Glingener.
ADVA developed the silicon photonics analogue front end for the module that uses a single laser. To fit the DSP and the optics in a QSFP28 also proved an integration challenge.
The Steelerton DSP is taped out and both companies expect to have 100ZR prototype modules in the second half of this year.
What next
ADVA is planning a 100ZR+ module that will have enhanced optical performance that will be available in prototype form in early 2023.
ADVA’s coherent module interest remains broadband. Possible developments include a 5nm CMOS 200-gigabit DSP or a cheaper, more power-efficient, second-generation 100-gigabit design.
ADVA is also exploring concepts such as a parallel design, a 4x100G implementation.
Meanwhile, II-VI is looking at high-end coherent designs, which may include multiple sources for silicon photonics
“The next obvious steps are 800 gigabits and 1.6 terabits,” says DeMott. “There is a lot of [industry] activity, so those would be directions we’re considering.” II-VI has in-house optics for high-end coherent designs.
There will be a market for 800-gigabit coherent modules, says DeMott, but hyperscalers already are asking for 1.6-terabit designs.
“These are divergent DSPs,” says DeMott. “You can’t do a DSP that does 1.6 terabits, 800 gigabits and 400 gigabits; it’s either a 1.6-terabit or a 400/ 800-gigabit DSP design.”
II-VI’s VCSEL approach for co-packaged optics
Co-packaged optics was a central theme at this year’s OFC show, held in San Diego. But the solutions detailed were primarily using single-mode lasers and fibre.
The firm II-VI is beating a co-packaged optics path using vertical-cavity surface-emitting lasers (VCSELs) and multi-mode fibre while also pursuing single-mode, silicon photonics-based co-packaged optics.
For multi-mode, VCSEL-based co-packaging, II-VI is working with IBM, a collaboration that started as part of a U.S. Advanced Research Projects Agency-Energy (ARPA-E) project to promote energy-saving technologies.
II-VI claims there are significant system benefits using VCSEL-based co-packaged optics. The benefits include lower power, cost and latency when compared with pluggable optics.
The two key design decisions that achieved power savings are the elimination of the retimer chip – also known as a direct-drive or linear interface – and the use of VCSELs.
The approach – what II-VI calls shortwave co-packaged optics – integrates the VCSELs, chip and optics in the same package.
The design is being promoted as first augmenting pluggables and then, as co-packaged optics become established, becoming the predominant solution for system interconnect.
For every 10,000 QSFP-DD pluggable optical modules used by a supercomputer that are replaced with VCSEL-based co-packaged optics, the yearly electricity bill will be reduced by up to half a million dollars, estimate II-VI and IBM.
VCSEL technology
VCSELs are used for active optical cables and short-reach pluggables for up to 70m or 100m links.
VCSEL-based modules consume fewer watts and are cheaper than single-mode pluggables.
Several factors account for the lower cost, says Vipul Bhatt, vice president of marketing, datacom vertical at II-VI.
The VCSEL emits light vertically from its surface, simplifying the laser-fibre alignment, and multi-mode fibre already has a larger-sized core compared to single-mode fibre.
“Having that perpendicular emission from the laser chip makes manufacturing easier,” says Bhatt. “And the device’s small size allows you to get many more per wafer than you can with edge-emitter lasers, benefitting cost.”
The tinier VCSEL also requires a smaller current density to work; the threshold current of a distributed feedback (DFB) laser used with single-mode fibre is 25-30mA, whereas it is 5-6mA for a VCSEL. “That saves power,” says Bhatt.
Fibre plant
Hyperscalers such as Google favour single-mode fibre for their data centres. Single-mode fibre supports longer reach transmissions, while Google sees its use as future-proofing its data centres for higher-speed transmissions.
Chinese firms Alibaba and Tencent use multi-mode fibre but also view single-mode fibre as desirable longer term.
Bhatt says he has been hearing arguments favouring single-mode fibre for years, yet VCSELs continue to advance in speed, from 25 to 50 to 100 gigabits per lane.
“VCSELs continue to lead in cost and power,” says Bhatt. ”And the 100-gigabit-per-lane optical link has a long life ahead of it, not just for networking but machine learning and high-performance computing.“
II-VI says single-mode fibre and silicon photonics modules are suited for the historical IEEE and ITU markets of enterprise and transport where customers have longer-reach applications.
VCSELs are best suited for shorter reaches such as replacing copper interconnects in the data centre.
Copper interconnect reaches are shrinking as interface speeds increase, while a cost-effective optical solution is needed to support short and intermediate spans up to 70 meters.
“As we look to displace copper, we’re looking at 20 meters, 10 meters, or potentially down to three-meter links using active optical cables instead of copper,” says Bhatt. “This is where the power consumption and cost of VCSELs can be an acceptable premium to copper interconnects today, whereas a jump to silicon photonics may be cost-prohibitive.”
Silicon photonics-based optical modules have higher internal optical losses but they deliver reaches of 2km and 10km.
“If all you’re doing is less than 100 meters, think of the incredible efficiency with which these few milliamps of current pumped into a VCSEL and the resulting light launched directly and efficiently into the fibre,” says Bhatt. “That’s an impressive cost and power saving.”
Applications
The bulk of VCSEL sales for the data centre are active optical cables and short-reach optical transceivers.
“Remember, not every data centre is a hyperscale data centre,” says Bhatt. ”So it isn’t true that multi-mode is only for the server to top-of-rack switch links. Hyperscale data centres also have small clusters for artificial intelligence and machine learning.”
The 100m-reach of VCSELs-based optics means it can span all three switching tiers for many data centres.
The currently envisioned 400-gigabit VCSEL modules are 400GBASE-SR8 and the 8-by-50Gbps 400G-SR4.2. Both use 50-gigabit VCSELs: 25 gigabaud devices with 4-level pulse amplitude modulation (PAM-4).
The 400GBASE-SR8 module requires 16 fibres, while the 400G-SR4.2, with its two-wavelength bidirectional design, has eight fibres.
The advent of 100-gigabit VCSELs (50 gigabaud with PAM-4) enables 800G-SR8, 400G-SR4 and 100G-SR1 interfaces. II-VI first demonstrated a 100-gigabit VCSEL at ECOC 2019, while 100-gigabit VCSEL-based modules are becoming commercially available this year.
Terabit VCSEL MSA
The Terabit Bidirectional (BiDi) Multi-Source Agreement (MSA) created earlier this year is tasked with developing optical interfaces using 100-gigabit VCSELs.
The industry consortium will define 800 gigabits interface over parallel multi-mode fibre, the same four pairs of multi-mode fibre that support the 400-gigabit, 400G-BD4.2 interface. It will also define a 1.6 terabit optical interface.
The MSA work will extend the parallel fibre infrastructure from legacy 40 gigabits to 1.6 terabits as data centres embrace 25.6-terabit and soon 51.2-terabit switches.
Founding Terabit BiDi MSA members include II-VI, Alibaba, Arista Networks, Broadcom, Cisco, CommScope, Dell Technologies, HGGenuine, Lumentum, MACOM and Marvell Technology.
200-gigabit lasers and parallelism
The first 200-gigabit electro-absorption modulator lasers (EMLs) were demonstrated at OFC ’22, while the next-generation 200-gigabits directly modulated lasers (DMLs) are still in the lab.
When will 200-gigabit VCSELs arrive?
Bhatt says that while 200-gigabit VCSELs were considered to be research-stage products, recent interest in the industry has spurred the VCSEL makers to accelerate the development timeline.
Bhatt repeats that VCSELs are best suited for optimised short-reach links.
“You have the luxury of making tradeoffs that longer-reach designs don’t have,” he says. “For example, you can go parallel: instead of N-by-200-gig lanes, it may be possible to use twice as many 100-gig lanes.”
VCSEL parallelism for short-reach interconnects is just what II-VI and IBM are doing with shortwave co-packaged optics.
Shortwave co-packaged optics
Computer architectures are undergoing significant change with the emergence of accelerator ICs for CPU offloading.
II-VI cites such developments as Nvidia’s Bluefield data processing units (DPUs) and the OpenCAPI Consortium, which is developing interface technology so that any microprocessor can talk to accelerator and I/O devices.
“We’re looking at how to provide a high-speed, low-latency fabric between compute resources for a cohesive fabric,” says Bhatt. The computational resources include processors and accelerators such as graphic processing units (GPUs) and field-programmable gate arrays (FPGAs).
II-VI claims that by using multi-mode optics, one can produce the lowest power consumption optical link feasible, tailored for very-short electrical link budgets.
The issue with pluggable modules is connecting them to the chip’s high-speed signals across the host printed circuit board (PCB).
“We’re paying a premium to have that electrical signal reach through,” says Bhatt. “And where most of the power consumption and cost are is those expensive chips that compensate these high-speed signals over those trace lengths on the PCB.”
Using shortwave co-packaged optics, the ASIC can be surrounded by VCSEL-based interfaces, reducing the electrical link budget from some 30cm for pluggables to links only 2-3cm long.
“We can eliminate those very expensive 5nm or 7nm ICs, saving money and power,” says Bhatt.
The advantage of shortwave co-packaged optics is better performance (a lower error rate) and lower latency (between 70-100ns) which is significant when connecting to pools of accelerators or memory.
“We can reduce the power from 15W for a QSFP-DD module down to 5W for a link of twice the capacity,” says Bhatt, “We are talking an 80 per cent reduction in power dissipation. Another important point is that when power capacity is finite, every watt saved in interconnects is a watt available to add more servers. And servers bring revenue.”
This is where the 10,000-unit optical interfaces, $0.4-$0.5 million savings in yearly electricity costs comes from.
The power savings arise from the VCSEL’s low drive current, the use of the OIF’s ultra short-reach (USR) electrical interface and the IBM processor driving the VCSEL directly, what is called a linear analogue electrical interface.
In the first co-packaged optics implementation, IBM and II-VI use non-return-to-zero (NRZ) signalling.
The shortwave co-packaged optics has a reach of 20m which enables the potential elimination of top-of-rack switches, further saving costs. (See diagram.)
II-VI sees co-packaged optics as initially augmenting pluggables. With next-generation architectures using 1.6-terabit OSFP-XD pluggables, 20 to 40 per cent of those ports are for sub-20m links.
“We could have 20 to 40 per cent of the switch box populated with shortwave co-packaged optics to provide those links,” says Bhatt.
The remaining ports could be direct-attached copper, longer-reach silicon-photonics modules, or VCSEL modules, providing the flexibility associated with pluggables.
“We think shortwave co-packaged optics augments pluggables by helping to reduce power and cost of next-generation architectures.”
This is the secret sauce of every hyperscaler. They don’t talk about what they’re doing regarding machine learning and their high-performance systems, but that’s where they strive to differentiate their architectures, he says.
Status
Work has now started on a second-generation shortwave design that will use PAM-4 signalling. “That is targeted as a proof-of-concept in the 2024 timeframe,” says Bhatt.
The second generation will enable a direct comparison in terms of power, speed and bandwidth with single-mode co-packaged optics designs.
Meanwhile, II-VI is marketing its first-phase NRZ-based design.
“Since it is an analogue front end, it’s truly rate agnostic,” says Bhatt. “So we’re pitching it as a low-latency, low-power bandwidth density solution for traditional 100-gigabit Ethernet.”
The design also can be used for next-generation PCI Express and CXL disaggregated designs.
II-VI says there is potential to recycle hyperscaler data centre equipment by adding state-of-the-art network fabric to enable pools of legacy processors. “This technology delivers that,” says Bhatt.
But II-VI says the main focus is for accelerator fabrics: proprietary interfaces like NVlink, Fujitsu’s Tofu interconnect or HPE’s Cray’s Slingshot.
“At some point, memory pools or storage pools will also work their way into the hyperscalers’ data centres,” says Bhatt.
Books read in 2021: Part 2
In Part II, two more industry figures pick their reads of the year: Sara Gabba of II-VI and Ciena’s Joe Marsella.
Sara Gabba, Strategic Marketing, II-VI
I’ve always read a lot. I cannot fall asleep without the sweet or the exciting company of a good book!
In the last year, I’ve spent many evenings reading fairy tales to my young daughter and, on top of the traditional ones from Andersen or the Grimm brothers, I’ve surprisingly discovered that she really likes the Greek myths (in an adaptation for children), which are the archetypes of most of the ‘modern’ tales. Love, mystery, jealousy, fear, talent, heroism: all the instincts and passions of humankind are there and able to capture every reader.
Coming to the books that I enjoyed most this past year, I’ll mention three, beginning with L’infinito Tra Le Note: Il Mio Viaggio Nella Musica (My Journey into Music) by the famous orchestra director Riccardo Muti.
In simple words, he leads you through the history of music, disclosing the essence of the main composers and the secrets that are hidden among their notes and silences, all filtered by his sensitivity and his long experience as director of the world’s most important orchestras.
Galeotto fu il collier (A Gallehault was the Collier) is an amusing book from the prolific and always brilliant pen of Andrea Vitali, an Italian writer whose novels typically take place in Bellano, a nice village on the eastern shore of the Lake of Como where he was born and worked as a general practitioner. Bellano is indeed a charming village, in addition to the well-known Bellagio.
This book is a choral novel, able to recreate the atmosphere of common life in 1930’s Italy. The comedy lies in the everyday routine of the many simple characters, in the plot full of anecdotes and of said-unsaid words: an amazing and wonderful comedy of errors!
Lastly, I really loved Liar Moon written by the Italian-American writer, Ben Pastor.
This romance is the second of the saga featuring Martin Bora, the Major of the Wehrmacht whose character was inspired by Claus von Stauffenberg, the German colonel who attempted to assassinate Adolf Hitler in 1944 (maybe you remember the Tom Cruise movie Valkyrie, also inspired by von Stauffenberg’s brave acts).
This historical mystery novel takes place in the North-East region of Italy during the German occupation in the Second World War, where the skilled army officer Bora solves a complex murder case. Martin Bora is fighting for the wrong side in the world conflict, so he obviously has all the characteristics to be a villain. However, he is far from being a stereotype and you cannot avoid but to love him for his torn sense of loyalty to his nation and his daring acts of disobedience to the criminal orders received from his commanders.
Joe Marsella, Vice President, Product Line Management, Routing and Switching at Ciena.
As an evolving society, we often tend to look back on the ‘good old days’ and lament how difficult life has become, often forgetting that as a whole we are much better off than we have ever been.
History, for me, is a healthy way of not only reminding oneself of that simple fact but also serving as an opportunity to learn from past experiences to improve the journey ahead.
With that in mind, one book I found extremely interesting in 2021 is One Minute to Midnight: Kennedy, Khrushchev, and Castro on the Brink of Nuclear War by Michael Dobbs, which tells the story of the days leading up to the Cuban Missile Crisis of 1962 and how close the world came to nuclear annihilation.
The story focuses on how quickly a series of decisions can escalate over a 13-day time frame and the ability of two opposing leaders to reach a compromise for the greater good of not only their respective countries but the world.
As business leaders, we are required to make decisions and negotiate constantly, and while our negotiated outcomes rarely reach the magnitude of Kennedy and Khrushchev in the fall of 1962, it’s reassuring to know that even in the most difficult circumstances agreements can be reached with mutually beneficial results.
Lumentum bulks up with NeoPhotonics buy
Lumentum is to acquire fellow component and module specialist, NeoPhotonics, for $918 million.
The deal will expand Lumentum’s optical transmission product line, broadening its component portfolio and boosting its high-end coherent line-side product offerings.
Gaining NeoPhotonics’ 400-gigabit coherent offerings will enable Lumentum to better compete with Cisco and Marvell. Lumentum will also gain a talented team of photonics experts as it looks to address new opportunities.
Alan Lowe, Lumentum’s president and CEO, stressed the importance of this collective optical expertise.
Speaking on the call announcing the agreement, Lowe said the expanded know-how would benefit Lumentum’s traditional markets and accelerate its entrance into other, newer markets.
Transaction details
Lumentum will pay $16 in cash for each share of NeoPhotonics, valuing the company at $918 million. Lumentum will also pay $50 million to NeoPhotonics “for growth capex and working capital.”
Cost savings of $50 million in annual run-rate are expected within two years of the deal closing, with 60 per cent of the savings coming from the cost of goods sold.
The deal is reminiscent of Lumentum’s acquisition of Oclaro for $1.8 billion in 2018. Oclaro was also focussed on transmission components and modules.
The acquisition is expected to close in the second half of 2022, subject to the approval of NeoPhotonics’ stockholders and regulatory bodies.
Background
Lumentum’s announcement follows its failed bid early this year for the laser company, Coherent. II-VI ended up winning the bid, paying $6.9 billion.
Coherent’s lasers are used in many markets and the deal would have diversified Lumentum’s business beyond communications and smartphones.
Now, the proposed acquisition of NeoPhotonics boosts Lumentum’s core communications business unit. NeoPhotonics’ focus is cloud and networking although the company has been using its coherent expertise to address LiDAR and medical markets.
Vladimir Kozlov, CEO of market research firm LightCounting, does not see any inconsistency in Lumentum’s strategy to first diversify and then strengthen its core business. “There are many directions to accelerate company growth,” he says.
Lumentum tried one way with Coherent, it didn’t work out, now it is trying another with NeoPhotonics. “You take opportunities as they come along,” says Kozlov.
NeoPhotonics has also been impacted by the trade restrictions on Huawei, a significant customer of the company. NeoPhotonics has had to adapt to on-off sales to Huawei in recent years. Huawei also has a long-term strategy to develop its optical components including tunable lasers for which NeoPhotonics has been their leading supplier.
“That certainly added pressure on NeoPhotonics to be acquired,” says Kozlov.
Business opportunities
Lumentum’s business is split 60 per cent cloud and networking and 40 per cent 3D Sensing, LiDAR, and commercial lasers for industrial applications.
Lumentum’s cloud and networking products include reconfigurable optical add-drop multiplexing (ROADM) sub-systems, optical components for high-speed client-side and line-side modules, and coherent optical modules.
NeoPhotonics brings ultra narrow-linewidth tunable lasers, silicon photonics-based components and transceivers, and high-speed coherent modules and components. NeoPhotonics also has passive and planar lightwave circuit components and an RF chip design capability using gallium arsenide and silicon germanium.
Tim Jenks, president, CEO and chairman of NeoPhotonics, said combining the two firms would accelerate its business developing high-speed optical communications.
In turn, their combined R&D and technology teams can address new markets such as the life sciences, industrial applications, and green markets such as energy efficiency, electric vehicles and climate change green manufacturing concerns.
But no detail was forthcoming on the call beyond Lowe saying the merger will expand the collective know-how and accelerate its entrance into these markets.
Lowe also highlighted the strong growth in high-speed ports due to the 30 per cent year-on-year growth in internet bandwidth.
LightCounting says the dense wavelength division multiplexing (DWDM) coherent market will experience a compound annual growth rate (CAGR) of 20 per cent over the next five years; the general optical market is growing at a 14 per cent CAGR.
Both companies have indium-phosphide components for coherent systems while NeoPhotonics has pluggable 400ZR and ZR+ products as well as silicon photonics components for coherent. Gaining NeoPhotonics’ ultra-narrow linewidth lasers will make Lumentum an even stronger laser supplier.
LightCounting’s Kozlov notes the importance of scale, especially when target markets are not huge and the number of large customers is limited. This is the case with 400ZR/ ZR+ coherent DWDM transceivers that NeoPhotonics started selling in 2021.
Amazon is the biggest buyer of such modules and it uses three suppliers. NeoPhotonics is a distant third in the race behind Acacia, now part of Cisco, and Inphi, part of Marvell. But unlike Acacia and Inphi, NeoPhotonics does not have its own coherent DSP.
Joining forces with Lumentum, NeoPhotonics is more likely to win a larger share of business at key customers, says LightCounting. The new Lumentum may still be third in the race, but it is no longer a distant third.
Recent announcements
Lumentum started shipping its 400-gigabit CFP2-DCO coherent module earlier this year. Its range of indium-phosphide coherent components operates at a 96-gigabaud (GBd) symbol rate that supports up to 800-gigabit wavelengths. Lumentum is developing components that will operate at 128GBd.
Lumentum also has a directly modulated laser (DML) supporting 100-gigabit wavelengths. Such a laser is used for 100-gigabit and 400-gigabit client-side pluggables. The company is also developing electro-absorption modulated laser (EML) technology that supports 200 gigabits and higher performance per lane.
Meanwhile, NeoPhotonics is shipping 400ZR QSFP-DD and OSFP 400ZR coherent optical modules. NeoPhotonics also has a multi-rate CFP2-DCO module with a reach of 1,500km at 400 gigabits. And like Lumentum, the company has indium-phosphide technology that supports 130GBd coherent components.
Kozlov believes Lumentum is in a good position.
On the call announcing the deal, Lumentum also delivered its latest quarterly results. “They can hardly keep up with demand,” he says.
The issue of shortages is getting worse. This is not because the shortages themselves are getting worse but that demand is ramping faster than the shortage issue can be resolved. “It’s a good problem to have,” says Kozlov.
Industry consolidation
The Lumentum-NeoPhotonics deal follows the recent announcement of the merger of two other mature optical players such as the systems vendors: ADTRAN and ADVA.
LightCounting’s Kozlov agrees consolidation is happening among mature optical component and optical networking companies but he points out that many new optical start-ups are emerging and not just in China.
“At the telecommunications part of CIOE (China International Optoelectronic Exposition), 500 companies were exhibiting,” says Kozlov. “And with the trade barriers, there is an extra incentive for companies in the West to double down on what they have been doing and maybe new companies to be formed.”
Companies have concerns about buying stuff from overseas so local companies are getting more business.
“We are going to see more consolidation but also new vendors entering the market and competing with the bigger guys,” says Kozlov.
The future of optical I/O is more parallel links
Chris Cole has a lofty vantage point regarding how optical interfaces will likely evolve.
As well as being an adviser to the firm II-VI, Cole is Chair of the Continuous Wave-Wavelength Division Multiplexing (CW-WDM) multi-source agreement (MSA).
The CW-WDM MSA recently published its first specification document defining the wavelength grids for emerging applications that require eight, 16 or even 32 optical channels.
And if that wasn’t enough, Cole is also the Co-Chair of the OSFP MSA, which will standardise the OSFP-XD (XD standing for extra dense) 1.6-terabit pluggable form factor that will initially use 16, 100 gigabits-per-second (Gbps) electrical lanes. And when 200Gbps electrical input-output (I/O) technology is developed, OSFP-XD will become a 3.2-terabit module.
Directly interfacing with 100Gbps ASIC serialiser/ deserialiser (serdes) lanes means the 1.6-terabit module can support 51.2-terabit single rack unit (1RU) Ethernet switches without needing 200Gbps ASIC serdes required by eight-lane modules like the OSFP.
“You might argue that it [the OSFP-XD] is just postponing what the CW-WDM MSA is doing,” says Cole. “But I’d argue the opposite: if you fundamentally want to solve problems, you have to go parallel.”
CW-WDM specification
The CW-WDM MSA is tasked with specifying laser sources and the wavelength grids for use by higher wavelength count optical interfaces.
The lasers will operate in a subset of the O-band (1280nm-1320nm) building on work already done by the ITU-T and IEEE standards bodies for datacom optics.
In just over a year since its launch, the MSA has published Revision 1.0 of its technical specification document that defines the eight, 16 and 32 channels.
The importance of specifying the wavelengths is that lasers are the longest lead items, says Cole: “You have to qualify them, and it is expensive to develop more colors.”
In the last year, the MSA has confirmed there is indeed industry consensus regarding the wavelength grids chosen. The MSA has 11 promoter members that helped write the specification document and 35 observer status members.
“The aim was to get as many people on board as possible to make sure we are not doing something stupid,” says Cole.
As well as the wavelengths, the document addresses such issues as total power and wavelength accuracy.
Another issue raised is four-wavelength mixing. As the channel count increases, the wavelengths are spaced closer together. Four-wavelength mixing refers to an undesirable effect that impacts the link’s optical performance. It is a well-known effect in dense WDM transport systems where wavelengths are closely spaced but is less commonly encountered in datacom.
“The first standard is not a link budget specification, which would have included how much penalty you need to allocate, but we did flag the issue,” says Cole. “If we ever publish a link specification, it will include four-wavelength mixing penalty; it is one of those things that must be done correctly.”
Innovation
The MSA’s specification work is incomplete, and this is deliberate, says Cole.
“We are at the beginning of the technology, there are a lot of great ideas, but we are going to resist the temptation to write a complete standard,” he says.
Instead, the MSA will wait to see how the industry develops the technology and how the specification is used. Once there is greater clarity, more specification work will follow.
“It is a tricky balance,” says Cole. “If you don’t do enough, what is the value of it? But if you do too much, you inhibit innovation.”
“The key aspect of the MSA is to help drive compliance in an emerging market,” says Matt Sysak of Ayar Labs and editor of the MSA’s technical specification. “This is not yet standardised, so it is important to have a standard for any new technology, even if it is a loose one.”
The MSA wants to see what people build. “See which one of the grids gain traction,” says Sysak.
Ayar Labs’ SuperNova remote light source for co-packaged optics is one of the first products that is compliant with the CW-WDM MSA.
Sysak notes that at recent conferences co-packaged optics is a hot topic but what is evident is that it is more of a debate.
“The fact that the debate doesn’t seem to coagulate around particular specification definitions and industry standards is indicative of the fact that the entire industry is struggling here,” says Sysak.
This is why the CW-WDM MSA is important, to help promote economies of scale that will advance co-packaged optics.
Applications
Cole notes that, if anything, the industry has become more entrenched in the last year.
The Ethernet community is fixed on four-wavelength module designs. To be able to support such designs as module speeds increase, higher-order modulation schemes and more complex digital signal processors (DSPs) are needed.
“The problem right now is that all the money is going into signal processing: the analogue-to-digital converters and more powerful DSPs,” says Cole.
His belief is that parallelism is the right way to go, both in terms of more wavelengths and more fibers (physical channels).
“This won’t come from Ethernet but emerging applications like machine learning that are not tied to backward compatibility issues,” says Cole. “It is emerging applications that will drive innovation here.”
Cole adds that there is hyperscaler interest in optical channel parallelism. “There is absolutely a groundswell interest here,” says Cole. “This is not their main business right now, but they are looking at their long-term strategy.”
The likelihood is that laser companies will step in to develop the laser sources and then other companies will develop the communications gear.
“It will be driven by requirements of emerging applications,” says Cole. “This is where you will see the first deployments.”
II-VI expands its 400G and 800G transceiver portfolio
II-VI has showcased its latest high-speed optics. The need for such client-side modules is being driven by the emergence of next-generation Ethernet switches in the data centre.
The demonstrations, part of the OFC virtual conference and exhibition held last month, featured two 800-gigabit and two 400-gigabit optical transceivers.
“We have seen the mushrooming of a lot of datacom transceiver companies, primarily from China, and some have grown pretty big,” says Sanjai Parthasarathi, chief marketing officer at II-VI.
But a key enabler for next-generation modules is the laser. “Very few companies have these leading laser platforms – whether indium phosphide or gallium arsenide, we have all of that,” says Parthasarathi.
During OFC, II-VI also announced the sampling of a 100-gigabit directly modulated laser (DML) and detailed an optical channel monitoring platform.
“We have combined the optical channel monitoring – the channel presence monitoring, the channel performance monitoring – and the OTDR into a single integrated subsystem, essentially a disaggregated monitoring system,” says Parthasarathi.
An optical time-domain reflectometer (OTDR) is used to characterise fibre.
High-speed client-side transceivers
II-VI demonstrated two 800-gigabit datacom products.
One is an OSFP form factor implementing 800-gigabit DR8 (800G-DR8) and the other is a QSFP-DD800 module with dual 400-gigabit FR4s (2x400G-FR4). The DR8 uses eight fibres in each direction, each carrying a 100-gigabit signal. The QSFP-DD800 supports two FR4s, each carrying four, 100-gigabit wavelengths over single-mode fibre.
“These are standard IEEE-compliant reaches: 500m for the DR8 and 2km for the dual FR4 talking to individual FR4s,” says Vipul Bhatt, senior strategic marketing director, datacom at II-VI.
The 800G-DR8 module can be used as an 800-gigabit link or, when broken out, as two 400-gigabit DR4s or eight individual 100-gigabit DR optics.
II-VI chose to implement these two 800-gigabit interfaces based on the large-scale data centre players’ requirements. The latest switches use 25.6-terabit Ethernet chips that have 100-gigabit electrical interfaces while next-generation 51.2-terabit ICs are not far off. “Our optics is just keeping in phase with that rollout,” says Bhatt.
During OFC, II-VI also showcased two 400-gigabit QSFP112 modules: a 400-gigabit FR4 (400G-FR4) and a multi-mode 400-gigabit SR4 (400G-SR4).
The SR4 consumes less power, is more cost-effective but has a shorter reach. “Not all large volume deployments of data centres are necessarily in huge campuses,” says Bhatt.
II-VI demonstrated its 800-gigabit dual FR4 module talking to two of its QSFP112 400-gigabit FR4s.
Bhatt says the IEEE 802.3db standard has two 400G-SR4 variants, one with a 50m reach and the second, a 100m reach. “We chose to demonstrate 100m because it is inclusive of the 50m capability,” says Bhatt.
II-VI stresses its breadth in supporting multi-mode, short-reach single-mode and medium-reach single-mode technologies.
The company says it was the electrical interface rather than the optics that was more challenging in developing its latest 400- and 800-gigabit modules.
The company has 100-gigabit multi-mode VCSELs, single-mode lasers, and optical assembly and packaging. “It was the maturity of the electrical interface [that was the challenge], for which we depend on other sources,” says Bhatt.
100-gigabit PAM-4 DML
II-VI revealed it is sampling a 100-gigabit PAM-4 directly modulated laser (DML).
Traditionally, client-side modules for the data centre come to market using a higher performance indium phosphide externally-modulated laser (EML). The EML may even undergo a design iteration before a same-speed indium phosphide DML emerges. The DML has simpler drive and control circuitry, is cheaper and has a lower power consumption.
“But as we go to higher speeds, I suspect we are going to see both [laser types] coexist, depending on the customer’s choice of worst-case dispersion and power tolerance,” says Bhatt. It is too early to say how the DML will rank with the various worst-case test specifications.
Parthasarathi adds that II-VI is developing 100-gigabit and 200-gigabit-per-lane laser designs. Indeed, the company had an OFC post-deadline paper detailing work on a 200-gigabit PAM-4 DML.
Optical monitoring system
Optical channel monitoring is commonly embedded in systems while coherent transceivers also provide performance metrics on the status of the optical network. So why has II-VI developed a standalone optical monitoring platform?
What optical channel monitors and coherent modules don’t reveal is when a connector is going bad or fibre is getting bent, says Parthasarathi: “The health and the integrity of the fibre plant, there are so many things that affect a transmission.”
Operators may have monitoring infrastructure in place but not necessarily the monitoring of the signal integrity or the physical infrastructure. “If you have an existing network, this is a very easy way to add a monitoring capability,” says Parthasarathi.
“As we can control all the parts – the optical channel monitoring and the OTDR – we can configure it [the platform] to meet the application,” adds Sara Gabba, manager, analysis, intelligence & strategic marcom at II-VI. “Coherent indeed provides a lot of information, but this kind of unit is also suitable for access network applications.”
The optical monitoring system features an optical switch so it can cycle and monitor up to 48 ports.
With operators adopting disaggregated designs, each element in the optical network is required to have more intelligence and more autonomy.
“If you can provide this kind of intelligent monitoring and provide information about a specific link, you create the possibility to be more flexible,” says Gabba.
Using the monitoring platform, intelligence can be more widely distributed in the optical network complementing systems operators may have already deployed, she adds.
Is traffic aggregation the next role for coherent?
Ciena and Infinera have each demonstrated the transmission of 800-gigabit wavelengths over near-1,000km distances, continuing coherent's marked progress. But what next for coherent now that high-end optical transmission is approaching the theoretical limit? Can coherent compete over shorter spans and will it find new uses?
Part 1: XR Optics
“I’m going to be a bit of a historian here,” says Dave Welch, when asked about the future of coherent.
Interest in coherent started with the idea of using electronics rather than optics to tackle dispersion in fibre. Using electronics for dispersion compensation made optical link engineering simpler.
Dave Welch
Coherent then evolved as a way to improve spectral efficiency and reduce the cost of sending traffic, measured in gigabit-per-dollar.
“By moving up the QAM (quadrature amplitude modulation) scale, you got both these benefits,” says Welch, the chief innovation officer at Infinera.
Improving the economics of traffic transmission still drives coherent. Coherent transmission offers predictable performance over a range of distances while non-coherent optics links have limited spans.
But coherent comes at a cost. The receiver needs a local oscillator - a laser source - and a coherent digital signal processor (DSP).
Infinera believes coherent is now entering a phase that will add value to networking. “This is less about coherent and more about the processor that sits within that DSP,” says Welch.
Aggregation
Infinera is developing technology - dubbed XR Optics - that uses coherent for traffic aggregate in the optical domain.
The 'XR’ label is a play on 400ZR, the 400-gigabit pluggable optics coherent standard. XR will enable point-to-point spans like ZR optics but also point-to-multipoint links.
Infinera, working with network operators, has been assessing XR optics’ role in the network. The studies highlight how traffic aggregation dictates networking costs.
“If you aggregate traffic in the optical realm and avoid going through a digital conversion to aggregate information, your network costs plummet,” says Welch.
Are there network developments that are ripe for such optical aggregation?
“The expansion of bandwidth demand at the network edge,” says Rob Shore, Infinera’s senior vice president of marketing. “It is growing, and it is growing unpredictably.”
XR Optics
XR optics uses coherent technology and Nyquist sub-carriers. Instead of a laser generating a single carrier, pulse-shaping at the optical transmitter is used to create multiple carriers, dubbed Nyquist sub-carriers.
The sub-carriers carry the same information as a single carrier but each one has a lower symbol rate. The lower symbol rate improves tolerance to non-linear fibre effects and enables the use of lower-speed electronics. This benefits long-distance transmissions.
But sub-carriers also enable traffic aggregation. Traffic is fanned out over the Nyquist sub-carriers. This enables modules with different capacities to communicate, using the sub-carrier as a basic data rate. For example, a 25-gigabit single sub-carrier XR module and a 100-gigabit XR module based on four sub-carriers can talk to a 400-gigabit module that supports 16.
It means that optics is no longer limited to a fixed point-to-point link but can support point-to-multipoint links where capacities can be changed adaptively.
“You are not using coherent to improve performance but to increase flexibility and allow dynamic reconfigurability,” says Shore.
Rob Shore
XR optics makes an intermediate-stage aggregation switch redundant since the higher-capacity XR coherent module aggregates the traffic from the lower-capacity edge modules.
The result is a 70 per cent reduction in networking costs: the transceiver count is halved and platforms can be removed from the network.
XR Optics starts to make economic sense at 10-gigabit data rates, says Shore. “It depends on the rest of the architecture and how much of it you can drive out,” he says. “For 25-gigabit data rates, it becomes a virtual no-brainer.”
There may be the coherent ‘tax’ associated with XR Optics but it removes so much networking cost that it proves itself much earlier than a 400ZR module, says Shore.
Applications
First uses of XR Optics will include 5G and distributed access architecture (DAA) whereby cable operators bring fibre closer to the network edge.
XR Optics will likely be adopted in two phases. The first is traditional point-to-point links, just as with 400ZR pluggables.
“For mobile backhaul, what is fascinating is that XR Optics dramatically reduces the expense of your router upgrade cost,” says Welch. “With the ZR model I have to upgrade every router on that ring; in XR I only have to upgrade the routers needing more bandwidth.”
Phase two will be for point-to-multipoint aggregation networks: 5G, followed by cable operators as they expand their fibre footprint.
Aggregation also takes place in the data centre, has coherent a role there?
“The intra-data centre application [of XR Optics] is intriguing in how much you can change in that environment but it is far from proven,” says Welch.
Coherent for point-to-point links will not be used inside the data centre as it doesn’t add value but configurable point-to-multiple links do have merit.
“It is less about coherent and more about the management of how content is sent to various locations in a point-to-multiple or multipoint-to-multipoint way,” says Welch. “That is where the game can be had.”
Uptake
Infinera is working with leading mobile operators regarding using XR Optics for optical aggregation. Infinera is talking to their network architects and technologists at this stage, says Shore.
Given how bandwidth at the network edge is set to expand, operators are keen to explore approaches that promise cost savings. “The people that build mobile networks or cable have told us they need help,” says Shore.
Infinera is developing the coherent DSPs for XR Optics and has teamed with optical module makers Lumentum and II-VI. Other unnamed partners have also joined Infinera to bring the technology to market.
The company will detail its pluggable module strategy including XR Optics and ZR+ later this year.
Infinera’s ICE6 sends 800 gigabits over a 950km link
Infinera has demonstrated the coherent transmission of an 800-gigabit signal across a 950km span of an operational network.
Infinera used its Infinite Capacity Engine 6 (ICE6), comprising an indium-phosphide photonic integrated circuit (PIC) and its FlexCoherent 6 coherent digital signal processor (DSP).
The ICE6 supports 1.6 terabits of traffic: two channels, each supporting up to 800-gigabit of data.
The trial, conducted over an unnamed operator’s network in North America, sent the 800-gigabit signal as an alien wavelength over a third-party line-system carrying live traffic.
“We have proved not only the state of our 800-gigabit with ICE6 but also the distances it can achieve,” says Robert Shore, senior vice president of marketing at Infinera.
800G trials
Several systems vendors have undertaken 800-gigabit optical trials.
Ciena detailed two demonstrations using its WaveLogic 5 Extreme (WL5e). One was an interoperability trial involving Verizon and Juniper Networks while the second connected two data centres belonging to the operator, Southern Cross Cable, to confirm the deployment of the WL5e cards in a live network environment.
Neither Ciena trial was designed to demonstrated WL5e’s limit of optical performance. Accordingly, no distances were quoted although both links were sub-100km, according to Ciena.
Meanwhile, Huawei has trialled its 800-gigabit technology in the networks of operators Turkcell and China Mobile.
The motivation for vendors to increase the speed of line-side optical transceivers is to reduce the cost of data transport. “One laser generating more data,” says Shore. “But it is not just high-speed transmissions, it is high-speed transmissions over distance.”
Infinera’s first 800-gigabit demonstration involved the ICE6 sending the signal over 800km of Corning’s TXF low-loss fibre.
“We did the demo on that fibre and we realised we had a ton of margin left over after completing the 800-gigabit circuit,” says Shore. The company then looked for a suitable network trial using standard optical fibre.
Infinera used a third-party’s optical line system to highlight that the 950km reach wasn’t due to a combination of the ICE6 module and the company’s own line system.
“What we have shown is that you can take any link anywhere, use anyone’s line system, carrying any kind of traffic, drop in the ICE6 and get 800-gigabit connections over 950km,” says Shore.
ICE 6
Infinera attributes the ICE6’s optical performance to its advanced coherent toolkit and the fact that the company has both photonics and coherent DSP technology, enabling their co-design to optimise the system’s performance.
One toolkit technique is Nyquist sub-carriers. Here, data is sent using several Nyquist sub-carriers across the channel instead of modulating the data onto a single carrier. The ICE6 is Infinera’s second-generation design to use sub-carriers, the first being ICE4, that doubles the number from four to eight.
The benefit of using sub-carriers is that high data rates can be achieved while the baud rate used for each one is much lower. And a lower baud rate is more tolerant to non-linear channel impairments during optical transmission.
Sub-carriers also improve spectral efficiency as the channels have sharper edges and can be packed tightly.
Infinera applies probabilistic constellation shaping to each sub-carrier, allowing fine-tuning of the data each carries. As a result, more data can be sent on the inner sub-carriers and less on the outer two outer sub-carrier where signal recovering is harder.
The sweet spot for sub-carriers is a symbol rate of 8-11 gigabaud (GBd). For the Infinera trial, eight sub-carriers were used, each at 12GBd, for an overall symbol rate of 96GBd.
“While it is best to stay as close to 8-11GBd, the coding gain you get as you go from 11GBd to 12GBd per sub-carrier is greater than the increased non-linear penalties,” says Shore.
Another feature of the coherent DSP is its use of soft-decision forward-error correction (SD-FEC) gain sharing. By sharing the FEC codes, processing resources can be shifted to one of the PIC’s two optical channels that needs it the most.
The result is that some of the strength of the stronger signal can be traded to bolster the weaker one, extending its reach or potentially allowing a higher modulation scheme to be used.
Applications
Linking data centres is one application where the ICE6 will be used. Another is sub-sea optical transmission involving spans that can be thousands of kilometres long, requiring lower modulation schemes and lower data rates.
“It’s not just cost-per-bit and power-per-bit, it is also spectral efficiency,” says Shore. “And a higher-performing optical signal can maintain a higher modulation rate over longer distances as well.”
Infinera says that at 600 gigabits-per-second (Gbps), link distances will be “significantly better” than 1,600km. The company is exploring suitable links to quantify ICE6’s reach at 600Gbps.
The ICE6 is packaged in a 5×7-inch optical module. Infinera’s Groove series will first adopt the ICE6 followed by the XTC platforms, part of the DTN-X series. First network deployments will occur in the second half of this year.
Infinera is also selling the ICE6 5×7-inch module to interested parties.
XR Optics
Infinera is not addressing the 400ZR coherent pluggable module market. The 400ZR is the OIF-defined 400-gigabit coherent standard developed to connect equipment in data centres up to 120km apart.
Infinera is, however, eyeing the emerging ZR+ opportunity using XR Optics. ZR+ is not a standard but it extends the features of 400ZR.
XR Optics is the brainchild of Infinera that is based on coherent sub-carriers. All the sub-carriers can be sent to the same destination for point-to-point links, but they can also be sent to different locations to allow for point-to-multipoint communications. Such an arrangement allows for traffic aggregation.
“You can steer all the sub-carriers coming out of an XR transceiver to the same destination to get a 400-gigabit point-to-point link to compete with ZR+,” says Shore. “And because we are using sub-carriers instead of a single carrier, we expect to get significantly better performance.”
Infinera is developing the coherent DSPs for XR Optics and has teamed up with optical module makers, Lumentum and II-VI.
Other unnamed partners have joined Infinera to bring the technology to market. Shore says that the partners include network operators that have contributed to the technology’s development.
Infinera planned to showcase XR Optics at the OFC conference and exhibition held recently in San Diego.
Shore says to expect XR Optics announcements in late summer, from Infinera and perhaps others. These will detail the XR Optics form factors and how they function as well as the products’ schedules.
ECOC 2019 industry reflections II
Gazettabyte requested the thoughts of industry figures after attending the ECOC show, held in Dublin. In particular, what developments and trends they noted, what they learned and what, if anything, surprised them. Input from II-VI, Ciena, Fujitsu Optical Components and Acacia Communications. The second and final part.
State of play for 400 Gigabit Ethernet (GbE). Form factors ‘right-sized’ for faceplate densities
Sanjai Parthasarathi, chief marketing officer at II-VI
One new theme at ECOC is the demand for lower-cost 100-gigabit coherent transceivers for deployment in optical access for wireless access and fibre-deep cable TV. Such demand would significantly expand the market.
It was noteworthy at the show how 5G has become a significant factor influencing the wireless access market, with the potential for wide deployment of dense wavelength-division multiplexing (DWDM) technology with wavelength switching and tuning functions, not only in traditional network architectures but interesting new ones too.
This could drive significant demand for low-cost wavelength-selective switch (WSS) modules, tunable transceivers and 100-gigabit coherent transceivers, which is exciting.
As for surprises at the show, ECOC validated the view that developments in digital signal processor (DSP) technology for transceivers have accelerated to the point of having caught up with the state-of-the-art in photolithography, previously the province of DSPs for consumer electronics, high-performance computing and processors.
DSPs, for next-generation transceivers, are increasingly leveraging 7nm CMOS.
Patricia Bower, senior manager of product marketing at Ciena
A key talking point at ECOC was the state of play for 400 Gigabit Ethernet (GbE). Form factors ‘right-sized’ for faceplate densities – QSFP-DD, for example – and developments in short-range optical signalling supporting 100 gigabit-per-lambda are enablers for this next-generation client rate.
Market projections for 400GbE indicate a faster ramp for 400GbE than for 100GbE in previous years and that 400GbE client-side modules will ship in 2020 with broad, market-wide volumes ramping in 2021.
In parallel, 400-gigabit DWDM is projected to grow very strongly. Starting in early 2020, deployments of 800 gigabit-capacity DWDM systems will enable the industry to efficiently transport 400GbE anywhere in the network, including transoceanic propagation.
Following this, 400ZR will enable 400 gigabits-per-second over short point-to-point, single-span data centre interconnect links using coherent technology in the same compact QSFP-DD mechanical forms which will go hand-in-hand with the volume uptake of 400GbE.
Co-packaged optics
Discussions continued around approaches to package optics and electronics in switch-fabric ICs.
The consensus was that the approach will be mainstream in future 51.2 terabits-per-second (Tbps) switch chips, a couple of iterations from where we are today.
I learned more about the progress supporting wafer-scale manufacturability of co-packaged switch cores and optical input/ outputs, including on-chip laser integration.
Consideration of the relative trade-offs among power dissipation, cost, thermal management, and reliability compared to off-chip lasers are key. Electrical signalling also remains key in this approach. Even moving data off a chip package optically, electrical intra-chip signaling to the switching core is still needed for what effectively is a multi-chip module or modular system-on-chip.
Companies with key design skills in electrical and optical components will be best placed to address such designs.
I wasn’t surprised but pleased to see the progress by the industry for 400ZR demonstrated at the OIF booth. Various companies showed IC-TROSA electro-optic samples which is a contributing element for a 400ZR solution.
Mechanical mock-ups of the intended module packages (QSFP-DD and OSFP) were also shown as well as a mock-up of a switch-router platform to highlight 400ZR integration.
This level of progress is in line with the expected ramp-up of 400ZR in 2021.
Yukiharu Fuse, chief marketing officer, vice president/ general manager, business strategy division, Fujitsu Optical Components Limited
Several items were of interest at ECOC, but two I’d highlight are 400-gigabit coherent pluggable optics and XR Optics.
Vendors demonstrated the progress being made in the development of 400-gigabit coherent pluggable transceivers.
The key is their success is the development of a low-power coherent digital signal processor (DSP) that fits within a QSFP-DD or OSFP module, and this now seems feasible.
With this innovation, data centre operators will be able to install these modules in the slots used for client Ethernet, allowing the operators to support data centre interconnect without the need for transport gear.
The OIF-standardised 400ZR implementation will support linking data centres up to 120km apart using interoperable pluggable modules. The data centre operators also want longer reaches that ZR offers even if the power consumption of the transceiver inevitably goes up.
To address this, NEL and Acacia together with Lumentum and Fujitsu Optical Components introduced OpenZR+ to support longer distance links for data centre interconnect and other applications.
This will act as a potential de-facto standard with multi-source transceivers to support distances beyond ZR.
Such a development will be a big step for the data center operators, enabling wider coverage without the need for transport equipment.
XR Optics
Infinera introduced at ECOC a new concept of point-to-multi-point communications for access and aggregation network, dubbed XR Optics. Using Nyquist subcarriers, XR Optics can distribute up to 16 points according to the bandwidth requirements.
This concept may create a new market for coherent optics that until now has focussed on high-capacity, point-to-point applications.
Infinera introduced at ECOC a technology not a product. It will be interesting to see how the technology evolves into products and the support it gets with the goal of creating a multi-source supply chain.
I’m curious about the concept, though, with the key being how to achieve low-cost coherent optics needed for access and aggregation networks. I will watch this development with interest.
Tom Williams, vice president of marketing, Acacia Communications
We are seeing a trend toward increasing use of silicon photonics in client and transport optics. There are multiple approaches in the industry to address the challenges of power, size and cost, but silicon photonics has become established as an important technology for a variety of applications.
We were also happy to see the positive feedback for the OpenZR+ solution that we, in collaboration with several other companies, defined at the show.
I’ve participated in the 400ZR effort and the CableLabs project to define a coherent interface in access networks, so I was interested to learn more about the Infinera XR optics proposal. I’m still trying to understand the details, but it’s always interesting to see a different approach to solving a technical challenge.
As for unexpected developments at the show, I was surprised how difficult it can be to get a taxi in Dublin when Ariana Grande is in town!
Interview: Finisar’s CEO reflects on a notable year
Michael Hurlston has had an eventful 2018.
The year started with him replacing Finisar’s veteran CEO, Jerry Rawls, and it is now ending with Finisar being acquired by the firm II-VI for $3.2 billion.
Finisar is Hurlston’s first experience in the optical component industry, having spent his career in semiconductors. One year in and he already has strong views about the industry and its direction.
Michael Hurlston
“We have seen in the semiconductor industry a period of massive consolidation in the last three to four years,” says Hurlston, in his first interview sinced the deal was announced. “I think it is not that different in optics: scales matters.”
Hurlston says that, right from the start, he recognised the need to drive industry consolidation. “We had started thinking about that fairly deeply at the time the Lumentum-Oclaro acquisition was announced and that gave us more impetus to look at this,” says Hurlston. The result was revealed in November with the announced acquisition of Finisar by II-VI.
“Finisar considered so many deals in the past but could not converge on a solution,” says Vladimir Kozlov, CEO and founder of market research firm, LightCounting. "It needed a new CEO to bring a different perspective. The new II-VI will look more like many diversified semiconductor vendors, addressing multiple markets: automotive, industrial and communications."
“We really have two complementary companies for the most part,” says Hurlston, who highlights VCSELs and reconfigurable optical add-drop multiplexers (ROADMs) as the only product segments where there is overlap. Merging II-VI and Finisar with disparate portfolios further benefits scale, he says.
Chip background
Hurlston’s semiconductor experience was gained at Broadcom and involved Wi-Fi devices. The key lessons he learned there is the importance of offering differentiated products to customers and the need to expand into new application areas.
“Wi-Fi is a standard, a technology, that has rules as you have to interoperate between different chipsets and different producers,” says Hurlston. “But we did find ways to differentiate under a standards umbrella.”
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“It turns out co-packaging is a great top-line opportunity for optics companies because eventually we will be tasked with pulling together that sub-system”
What he has found, to his surprise, is that it is harder to differentiate in the optical components industry. “What we are trying to do is find spots where we can offer differentiation,” says Hurlston.
Optical components usage needs to also expand into new segments, he says, just as Wi-Fi evolved from a PC-centric technology to home networking and ultimately mobile handsets.
Hurlston cites as an example in the optical components industry how VCSELs are now being used for 3D sensing in handsets. There are also emerging opportunities in automotive and the data centre.
For the automative market, applications include in-cabin sensing to assist drivers and LIDAR (laser detection and ranging) to help vehicles build up an image of their surroundings in real-time. “LIDAR is further out but it is a significant opportunity,” says Hurlston.
For data centres, a key opportunity silicon co-packaging: bringing optics closer to switch silicon.
Currently, switch platform use pluggable optical modules on the faceplate to send and receive data. But with switch silicon capacity doubling every two years, the speed and density of the input-output means optics will have to get closer to the switch silicon.
On-board optics - as promoted by the Consortium for On-Board Optics (COBO) - is one option. Another is co-packaged optics, where the optics and silicon are placed in the same package.
“It turns out co-packaging is a great top-line opportunity for optics companies because eventually we will be tasked with pulling together that sub-system,” says Hurlston. “The integration of the switch chip and optics is something that will be technically difficult and necessitate differentiation.”
Challenges
As well as the issue of acquisitions, another area Hurlston has tackled in his short tenure is Finisar’s manufacturing model and how it can be improved.
“Finisar is a technology company at heart but the life-blood of the company is manufacturing,” he says.
Manufacturing is also one area where there is a notable difference between chips and optics. “There are manufacturing complexities with semiconductors and semiconductor process but optics takes it to a whole different level,” he says.
This is due to the manufacturing complexity of optical transceiver which Finisar’s CEO likens to manufacturing a mobile phone. There are chips that need a printed circuit board onto which are also added optical subassemblies housing such components as lasers and photo-detectors.
“Part of it [the complexity] is the human labour - the human touch - that is involved in the manufacturing and assembling of these transceivers ” he says. Finisar says its laser fab employs several hundred people whereas its optical transceiver factories employ thousands: 5,000 staff in Malaysia and some 5,500 in China.
“Our manufacturing model has been where I’ve spent a lot of time,” says Hurston. Some efficiencies have been gained but not nearly as much as he initially hoped.
Consolidation
One of the issues that has hindered greater industry consolidation has been the need for synergy between companies. A semiconductor company will only acquire or merge with another semiconductor company, and the same with a laser company looking for another laser player, he says. “What I admire about II-VI is that they are pretty bold,” says Hurlston. “What II-VI did is go after something that is not overlapping.”
He believes the creation of such broad-based suppliers is something the optics industry will have to do more of: “The transceiver guys are going to have to go after different areas of the value chain.”
In most mature industries, three large diversified companies typically dominate the marketplace. Given Lumentum’s acquisition of Oclaro has just closed and II-VI’s acquisition of Finisar is due to be completed in mid-2019, will there be another large deal?
“This is a big industry and the opportunity today and going forward is big,” says Hurlston. But there are so many players in different parts of the supply chain such that he is unsure whether these niche companies will survive in the long run.
“Whether there will be three, four or five large players, I don’t know,” he says. “But we are definitely going to see fewer; this [II-VI - Finisar deal] isn't the last transaction that drives industry consolidation.”
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“Whether there will be three, four or five large players, I don’t know but we are definitely going to see fewer”
How will Finisar make optical transceivers in such a competitive marketplace, that includes an increasing number of Chinese entrants, while delivering gross margins that meet Wall Street expectations?
Finisar does have certain advantages, he says, such as making its own lasers. “We also make our own semiconductors, a lot of the semiconductor solutions the Chinese guys have are sourced,” he says. “That gives us an inherent advantage.”
Having its own manufacturing facilities in the Far East means that Chinese players have no inherent manufacturing advantage there. However, he admits that the gross margin expected of Finisar is higher that its Chinese competitors.
This is why Finisar’s CEO stresses the need to pursue pockets of differentiation and why the company has to be first to market in important productareas that all players will target. “We historically have not been first to market,” he says. “We have made adjustments in the last year in our time-to-market and our ability to get to big products transitions that will be hyper-competitive first.”
Hurston expresses some satisfaction in the improved revenues and gross margins as reported in Finisar’s last two quarters’ results, albeit these quarters coming after what he calls ‘a low base’.
“We have also made significant progress in 3D sensing that has been a big challenge for us,” he says.
What next?
Hurlston says he hopes to have a role in the new company once the deal closes.
“But If I don’t, I’ve really enjoyed working with the [Finisar] team and in this space,” he says. “It’s been a bit of a learning curve but I’ve learnt a couple of tricks. Hopefully there will be another opportunity to apply some of that learning to a job elsewhere.”