Project # Aberdeen Group Boston Palo Alto Amsterdam The Photon Revolution Presented by: Elizabeth J. Bruce Research Analyst April

Project #

Aberdeen Group

Boston Palo Alto Amsterdam

www.aberdeen.com

The Photon Revolution

Presented by:Elizabeth J. BruceResearch Analyst

April 18, 2023

2Practice Area OverviewSource: Aberdeen Group © 2000

Optical Components

“Optical technology is now the most rapidly improving technology in industrial history”

– James Crowe, Founder and CEO of Level 3 Communications


Why Fiber and Photons?

What if you wanted to download

The Matrix on DVD….

How long would it take?

Dial-up Modem 56 Kb/s 15 hours

Cable Modem or DSL 1 Mb/sec 1 hour Standard Ethernet 10 Mb/sec 6 mins Multiplexed Fiber 100 Mb/sec 35 secs


Market is Paying Attention!

JDSU $72 B Sony $72 B

Corning $62 B Boeing $56.5 B

Avanex $5.8 B Amazon.com $10.5 B

- Nov 15, 2000


Agenda

• Component Technologies

• Technology Trends

• The Market: Big Picture

• Dynamics & Trends


Optical Components. The Big Picture

• All about Photons • Parallels to Semiconductor Industry• Technology

– competing technologies– innovation in materials & integration

• Market– emerging companies– consolidation: mergers & acquisitions


Optical Networking: Big Picture

Components

Systems

ServiceProviders

Electronics Optical

JDSU, Corning, Lucent

Nortel, Alcatel, Ciena

Global Crossing, Level 3, Qwest

Materials


Component Applications

Transmission

Lasers &

Modulators

ReceiverTransmitter

Optical Multiplexor

OpticalAmplifiers

OpticalDemultiplexor

Detectors

1

2

3

4

1

2

3

4


Optical Spectrum Use by Application

• Telecommunications wavelengths fall into different bands– 800nm– 1300nm– 1550nm

400 1000 1300 1500

Short ReachSONET DWDM

700

VisibleLight

800Wavelength (nm)


Component Materials & Applications

There are a multiple number of component materials and a multiple number of applications.

SiON

Photonic Crystals

Polymers

Thin Film Filters

Silica-on-Silicon

InP

LiNbO3

ModulatorsWaveguides

Switches

Mux/Demux

Attenuators

ApplicationsMaterials


Optical Component Classes

ACTIVES PASSIVES

Lasers

Detectors

Modulators

Multiplexers

Attenuators

Switches


Optical-Networking Components

• Transmit & Receive Devices

• Optical Amplification Products

• Optical Switching & Cross-Connect Modules

• WDM Modules

• Fiber Optic Products



Transmission

Lasers &

Modulators

ReceiverTransmitter

Optical Multiplexor

OpticalAmplifiers


Detectors

1

2

3

4

1

2

3

4


Transmit Devices

• EDGE-EMITTING– Distributed Feedback Lasers (DFB)– Fabry-Perot Lasers (FP)

• Vertical Cavity Surface Emitting Lasers (VCSELS)

• TUNABLE LASERS


VCSELS?

• Major application for VCSELS to date: short reach

• Recent developments at longer wavelengths

• Advantages:– On-chip testing before wafer cut into

individual devices– Output beam is nice and big and

round– Relatively high yield devices

• Disadvantages:– Low power


Tunable Lasers

• Edge-emitting lasers, VCSELS (MEMs and Electro-optic), NCSELs, External-cavity lasers using MEMs technology

• Application:– Inventory reduction– DWDM networks– Dynamic wavelength provisioning

• Companies: Lucent, Bandwidth9, Agility Communications, Altitun, CoreTek, ….

vs.



Transmission

Lasers &

Modulators

ReceiverTransmitter

Optical Multiplexor

OpticalAmplifiers


Detectors

1

2

3

4

1

2

3

4


DWDM modules

• Different Technologies:– Arrayed Waveguide

Gratings– Thin Film Filters– Fiber Bragg Gratings

• Companies: JDSU, Oplink Communications, Avanex, Kymata, Bookham Technologies, Nanovation Technologies, Lightwave Microsystems….


Optical Switching Applications

• External Modulation • Protection Switching/Restoration • Dynamic Optical Add/Drop

Multiplexers (OADMs)• Dynamic Provisioning• All-Optical Cross-connect (OXC)


Optical Switching Technologies

• MEMs – MicroElectroMechanical• Liquid Crystal• Opto-Mechanical• Bubble Technology• Thermo-optic (Silica, Polymer)• Electro-optic (LiNb03, SOA, InP)• Acousto-optic• Others…



Transmission

Lasers &

Modulators

ReceiverTransmitter

Optical Multiplexor

OpticalAmplifiers


Detectors

1

2

3

4

1

2

3

4


Optical Amplification

• Erbium-Doped Fiber Amplifiers (EDFAs) – application in long haul. Today’s amplifier of choice.• Raman Amplifiers – application in DWDM• Erbium-Doped Waveguide Amplifiers (EDWAs) – application in metro and access networks

Why? – Extend distance light signal can travel without regeneration

Standard FiberAmplifier

Pump Lasers


Integration - Today

Optical Interleaver

MechanicalSwitch

DWDM Module

Add/Drop Mux

Laser

Wavelength Locker

Detector


Integration - Today


Integration - Future

Photonic Chip


Industry Trends

• Integration. Demand shifting from component level to integrated modules.

• Scalability. “Pay-as-you-grow” philosophy.

• Innovation. Product life cycles getting shorter. Suppliers must have strong R&D.

• Customization. Working with customers to provide next-generation optical systems.


Integration

• Parallels to the semiconductor industry ~25 years ago

• discrete components• assembly

• “Evolving Integration”


Integration

Passive Building Blocks

Integrated Passive Building Blocks

IntegratedActive/Passive Systems

Time

Deg

ree

of I

nteg

rati

on


Scalability

• Industry referred to as a “cottage industry”• Optical components are sophisticated devices:

– Requires people with experience– Fiber-handling to wafer processing to thin film production

• Packaging is a significant portion of the cost (up to 90%).

• Difficult to implement Automation and scale Manufacturing

• No standard automation equipment – often times proprietary methods


Customization

• Everything is custom – catalogs just show what we are capable of…

• Custom Integration: Optical ASICs.• Standard packaging and custom optics.


Market Size

• According to OIDA, – Total Market 1999: (Communications,

Storage, Display, Image Acquisition) : $58.9B

– Communications: $28.9B

-Lightwave, Dec 1999


Market Dynamics

– 100’s of Suppliers.– Enormous growth: suppliers are rapidly

expanding their manufacturing facilities and investing in production equipment.

– Consolidation and acquisition of suppliers is changing the component landscape on very short time scales.

– Confusing Space: Company A may buy from, compete with and form a partnership with Company B.


Component Demand

Industry-wide component shortage.

Number of Channels

Number ofNodes

23080 120

Demand forComponentsLong-Haul

MetroAccess

EnterpriseFTTH


Key Findings

• Difficult for new systems suppliers to guarantee a supply of components.

• Maintain close integration between developments in component technologies and next-generation networking equipment

• When and what to outsource??– Various levels of outsourcing at equipment

level:• Cisco. Partner with Corning.• Ciena. Some key component development in-

house.• Nortel/Alcatel. Major component divisions• Lucent. Spin-off components division.


Key Findings

• Sources, modulators, and receivers at 40Gb/sec

• Tunable Lasers• Dealing with 40 Gb/sec

systems: Dispersion


Key Findings

• Amplifier products: Raman, EDWAs

• Higher channel count WDM modules

• New modulation schemes: optical CDMA, FDM, NRZ to RZ


Key Trends

• Manage Bandwidth: Optically instead of Electronically.

• Emerging metro/access market.– Cost– Size– Supply


Suppliers


Conclusions

• It’s all about PHOTONS• The optical components industry is

growing fast – but still at an early stage• Impact is significant - from long haul

transport to metro to enterprise to computer interconnects


Thank You!

ABERDEEN GROUP

[email protected]

Boston, MA

www.aberdeen.com

[email protected]


SUPPLEMENTAL SLIDES


Market Demand

• Demand: Increased bandwidth requirements– Fiber to the Home/Curb– Streaming media, video-on-demand– Holographic telephony– Wireless services– Video-equipped phones– Distribution of: media, software, CDs,

DVDs, the broadcast entertainment world– Unforeseen applications (things like

Napster…)


Market Segments

– Ultra-Long Haul. Cross-country and long distance connections between cities.

– Long-Haul. Provide point-to-point traffic between major cities. Used by large service providers.

– Metro (MAN). Connections within urban areas. Provide service to a variety of customers in a metropolitan region.

– Access Systems. Provide service to an end-user. Connections to Businesses and Homes.

– Enterprise/Local Area Network (LAN) and Storage Area Networks (SAN). Gb and 10Gb Ethernet, Fibre Channel, etc..


Photon Transport Today

Total Capacity

Channels Single Channel

Distance

Siemens AG

7.04 Tb/s 176 40 Gb/s ??

Alcatel 5.12 T/s 128 40 Gb/s Over 300km

Fujitsu 2.11 Tb/s 211 10 Gb/s 7,200km

Documents

Project # Aberdeen Group Boston Palo Alto Amsterdam The Photon Revolution Presented by: Elizabeth J. Bruce Research Analyst April