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Silicon photonics markets extend beyond datacoms – analyst Yole

13 May 2020

Review predicts sustained growth for booming technology with sales expected to hit $3.9B by 2025; Intel leading.

In 2019, shipments of silicon photonic transceivers for data centers reached almost 3.5 million units, yielding revenues worth $364 million (€329 M). And the success story does not stop there, says a key market analyst from market research company Yole Développement.

“Indeed, this is an impressive growth since most products appeared in 2016 and 2017,” commented Alexis Debray, PhD, Technology & Market Analyst at Yole. “Silicon photonics transceivers have better reliability and lower price than transceivers based on legacy optics. We see lot of new companies that are focusing their activities on the development of transceivers to penetrate the silicon photonics world for telecom/datacom applications.”

Silicon ecosystem

This sector’s growth is expected to continue in coming years, explains Yole in its latest report Silicon Photonics Market & Technology 2020. Silicon photonics is focused on global network traffic. This doubles every three years thanks to applications in Cloud, video streaming, and IoT. Consequently, the silicon photonic transceiver market is directly impacted. Yole’s analysts expect this industry to be worth US$3.6 billion in 2025 with 24 million units shipped.

In parallel, the development of silicon photonic transceivers as an industry with millions of units shipped has resulted in the emergence of an ecosystem also involving process design kits, design rules, simulation software, testing equipment, and wafer foundries. This ecosystem is enabling new companies to easily access this technology and enter new applications.

New players emerging

Notable new players include Californian startup Genalyte, set to release immunoassays based on silicon photonics later this year. Fiber optic gyroscopes using silicon photonics were announced for this year by KVH, a Middletown, RI-based mobile connectivity and inertial navigation systems developer. Silicon photonics-based electronic noses, LiDARs, and OCT systems are under development and expected in coming years.

Yole and its partner System Plus Consulting, which is also based in France, have delivered this year two significant analyses dedicated to silicon photonics technologies and associated industries. System Plus is offering a special case study focused on Intel’s silicon photonic transceiver to illustrate latest innovations and technical choices from that company.

The Silicon Photonics report from Yole reveals market trends and figures, an overview per market segment, a detailed description of the competitive landscape and a relevant technology roadmap. This includes developments related to co-packaged technologies from Intel and Rockley Photonics.

Intel gets ahead

Intel, which is marketing servers, has 60% market share in silicon photonic transceivers for datacom. In just a few years, Intel has already shipped more than 3 million units of its 100G pluggable transceivers, stated the new report. “With its CWDM4 100G technology, Intel is the first in the world to offer a silicon photonic solution up to 10km for direct detection,” said Sylvain Hallereau, Senior Technology & Cost Analyst, at System Plus. “The 100G PSM4 and CWDM4 represent the first step, with Intel’s 200G and 400G products expected to enter volume production in the second half of 2020.”

Intel’s transceiver reuses a part of the PSM4 technology, but many other facets represent new approaches from the leading company. The transceiver comes with two separated lines with several dies. The transmitter silicon photonic die integrates four indium phosphide lasers for the four wavelengths, in a different configuration than the PSM4. On the same die, a Mach-Zehnder modulator is added to modulate the signal, but the CWDM MZI is more complex.

Light extraction is performed by the edge of the die and not by a mirror. Other components have been added to the system in order to focus or isolate the signal. Data is processed by using a four-channel 25G optical CDR component from another silicon photonics firm Macom.

System Plus Consulting’s analysts describe and analyze Intel’s potential in terms of packaging and photonics. Within a very small form factor, Intel has integrated four lasers, a photonic driver, optical modules, CDR functionality, high-performance photo-diodes, two advanced substrates, and materials for optics. “This tendency of vertical integration is continuing, and silicon photonics seems to be an opportunity for system companies to enter the transceiver market,” commented Eric Mounier, PhD. Fellow Analyst at Yole.

Other key players

“This is the case for Juniper Networks, a leader in routers and switches, which acquired Aurrion in 2016 for US$165 million and which is preparing 400ZR silicon photonics transceivers,” Mounier added. “Fujitsu Optical Networks is proposing 400ZR silicon photonic transceivers. Nokia acquired Elenion in February 2020.”

However, diversity is key for businesses to operate smoothly. Other companies like Inphi and NeoPhotonics are proposing silicon photonic transceivers with strong technologies. HPE is developing a platform for the development of silicon photonics with several partners.

China also has strong ambitions for 5G and Cloud datacenters. Several Chinese companies are entering the silicon photonic market, usually with Western companies. Alibaba Cloud is collaborating with Elenion, Hengtong with Rockley Photonics, and Broadex with Sicoya.

Silicon photonics has shipped millions of units of optical transceivers. It is expected to be a key technology for network switches in the next five years with CPO. The number of companies interested in silicon photonics is impressive, commented Yole, adding “Silicon photonics has become an established industry and will enable new applications in coming years.”

Presentation alongside the 22nd CIOE

Yole is collaborating with the forthcoming China International Optoelectronic Expo to organize a new Executive Forum on Optical Transceivers and Silicon Photonics. The Optical Transceivers & Silicon Photonics Forum 2020 is currently scheduled to take place on September 9 at 13.00, in Shenzhen, China, alongside the 22nd CIOE. This forum is set to be the first conference focused on optical transceivers and silicon photonics. The event will explore optical transceiver applications within the optical communication industry.

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