LightCounting has released a report 'Market Opportunity for Optical Integration Technologies, Including Silicon Photonics' giving an analysis of the potential impact of integration technologies on the market for optical transceiver module and related components used in data centers and other networking systems.
The potential impact of photonic integration on the optical communications market has captivated the imagination of the industry for the last two decades. Recent successes by vendors developing integrated products using silicon photonics (SiP) has led to several mergers and high-value acquisitions in 2012-2013, and shipments of SiP-based products increased in 2014-2015.
It seems clear that several SiP suppliers demonstrated that the technology works, notes the report. However, it is up to the manufacturing engineers and business managers of these suppliers to show that SiP products can be made in high volume at a competitive cost and generate profits to fund development of next-generation products. As often happens with new technologies, product sales are starting to ramp up just as industry expectations start to fade.
The key question now is how much of an impact optical integration technologies will have on the market in 2016-2021, says LightCounting. Will SiP replace more mature indium phosphide (InP) and gallium arsenide (GaAs) technologies, which dominated the market over the last decade and already enabled a variety of integrated products?
Segmented by primary application, including Ethernet, WDM, and active optical cables (AOCs) and embedded optical modules (EOMs), the report presents data on advances made by optical integration technologies during 2010-2015 and gives a forecast for shipments and sales of discrete and integrated products based on InP, GaAs and SiP technologies for 2016-2021.
Competition from more established InP and GaAs technologies will be fierce in 2016-2021, predicts the report. There is not a single SiP-based product on the market that does not have an alternative made using InP and GaAs optics.
"Many in the industry have predicted that silicon photonics (SiP) will enable inexpensive, mass-produced optical connectivity, radically changing the optical components and modules industry," comments LightCounting's CEO & founder Vladimir Kozlov. "Our analysis suggests this will not happen in the next 5 years, but sales of SiP-based optical products may reach $1bn by 2020, accounting for about 10% of the market."
If SiP-based products can weather the fierce competition from more established technologies and gain a beach-head in this market by 2020, it may disrupt the market over the next decade. Such a disruption will require development of wafer-scale optical manufacturing, packaging and testing technologies, compatible with 3D wafer stacking for integration with electronics, says LightCounting.
Nevertheless, even a distant possibility of a technological disruption has justified investment into SiP technology by Cisco, which was then followed by many other equipment suppliers. Optical integration start-ups continue to raise funding and all established suppliers of components and modules have SiP technology on their roadmap. The chances for success are still low and distant, but no vendor can afford to ignore the possibility of a disruption, concludes the LightCounting.
