The Latest Market Trends Shaping Optical Communications
The world is becoming connected faster than ever anticipated. To keep up, the digital infrastructure is increasingly relying on high-speed fiber optics. In a recent webinar, Vladimir Kozlov PhD, Founder & CEO of LightCounting, and Jabil Chief Photonics Scientist Larry Tarof PhD, explored the technological advancements and market trends shaping the optical communications industry. Here are a few highlights:
Big Picture Fundamentals
Since 2000, a number of optical communications solutions have been developed including Direct Attached Copper (DAC), Vertical-Cavity Surface-Emitting Laser (VCSEL) and Photonic-Integrated Circuit (PIC). Over the last two years, there was disruption caused by DACs being replaced by VCSELs, which were then replaced by PICs. These latest solutions will be critical in driving the Internet of Things (IoT) and 5G across data centers of the future. But keep in mind, such technologies will only dominate if they're marketplace competitive. The industry must overcome several obstacles in order to achieve this:
According to Moore's Law, the number of elements on an Application-Specific Integrated Circuit (ASIC) doubles every two years and indeed it has. PIC solutions, however, are falling behind with the number of elements only doubling every 3.4 years. They simply can't compete with such a lack of density over time. The troubling data begs the question: how can more bits be crammed into less volume?
Another issue is the vast array of materials involved in the solution ecosystem. There are many different elements, each of which is its own discipline and can only be addressed by PIC eco-participants with deep domain expertise. These material challenges make it very difficult to standardize photonics solutions.
As data centers continue to grow, cooling is dominating power consumption. Power is used to heat the photonics elements to make them work and then must be used to cool them down at the same time. If they get too hot, they'll perform poorly. With finite energy resources available, these centers struggle to power the elements while making them operate efficiently. As the demands of connectivity continue to increase, this problem will only get worse.
Even though the technology exists for optical communications, it won't be adopted by the industry unless there is more performance for less cost. Packaging also drives cost considerations. There are many solutions for each packaging challenge and every company has its own way of doing it, yet there is no collaboration or integration between these solutions. The PIC-centered ecosystem is mismatched with the marketplace. For these solutions to succeed, there must be better cooperation and more partnerships within the network of providers.
The optical communications industry was really reshaped by the telecom bubble of 2000-2001 when sales had spiked to $4 billion. After the market crashed, it took the industry about 10 years to recover. This decade brought on changes such as what products are made, how they are built, how they are used and where they are made.
After the bubble, the market saw steady growth and is on track to top $12 billion by 2021. Several applications are responsible for this growth. Traditionally, long-distance communications were the main market for optics. In 2005, the fiber-to-the-home market emerged, presenting a high-volume opportunity for solutions providers. More recently, optics in data centers have been driving market growth over the past two to three years and will continue to drive demand for the next five years.
One of the most fascinating uses of optics is submarine communications. Very long cables connect submarines deep underwater to vessels at the surface. This wouldn't be possible without breakthrough amplifier technology that boosts the signal as it travels through the fiber optics. Another advancement was the development of Bidirectional Optical Sub-Assemblies. Less than a ½ inch in size, these devices provide an optical connection for every house or apartment. Nearly 100 million units are now being shipped to the fiber-to-the-home market.
Perhaps the most impactful technology is optical transceivers for mega data centers. These massive information structures contain many racks of servers interconnected by bundles of switches and cables. As the number of applications increases, there will be even more opportunities to develop new technologies.
Watch the full presentation of the latest trends in optical communications below: