market forecast for on-board and co-packaged optics...market for on-board optics (a.k.a. eoms) from...

Summary of the report produced for ARPA-E

Market Forecast for On-board and Co-packaged Optics

October 31, 2019

2

ОN-BOARD and CO-PACKAGED OPTICS | October 31, 2019

Study Objectives

Drivers: What is the motivation to move to more integrated modules? What are the benefits for customers? Why change?

Success factors: What factors are required for a broad-based movement to on-board and co-packed optics?

Barriers: What are some of the reasons on-board and co-packaged optics may not be adopted?

Recommendations on how to overcome the barriers LightCounting will assess both the technology and business barriers for development of a robust and broad-based market for on-board and co-packaged optics.

Opportunity size for products related to its scope LightCounting will perform market research to make estimates of types of modules consumed by data centers. This will include historical estimates for 2010-2018 and LightCounting projections for 2019-2028.

3


Part 1: Opportunity Size

4


The latest Forecast: Total Ethernet

ОN-BOARD and CO-PACKAGED OPTICS, PHASE 1| JULY 22, 2019

5


Changes in the Forecast: 100GbE onlyLowering projections for CWDM4 sub-spec and DR1s

6


Ethernet transceiver sales by End User

24%

19%

57%

2010 Ethernet revenue by segment $0.5 billion

Telecom19%

Cloud65%

Enterprise16%

2018 Ethernet revenue by segment $3.1 billion total


7


Sales of Ethernet to the CloudThe all other category will grow faster in 2020-2024

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

$ m

illio

ns

Top 5 Cloud All Other Cloud


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Market for On-Board Optics (a.k.a. EOMs)From LightCounting report on AOCs/EOMs published in December 2018

Total shipments in 2018 were about 300,000 units, forecast for 2023 is 700,000 units – a niche market.

COBO, supported by Microsoft will be 50% of this market segment by 2023 as long as Microsoft remains interested in an improved port density and operational benefits of COBO modules (these can be pre-installed by suppliers). An example of how one large customer can potentially change a market segment.

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Part 1: Conclusions1. Consumption of Ethernet optical transceivers is likely to exceed 100 Million Units per year

before 2028.• Manufacturing, handling and installing such high number of modules is challenging, but

it can be done. FTTH market is an example of such high volume market.2. Majority of these devices will be operating at 100G and above. Deployments will be highly

concentrated in very large mega DC clusters.3. Top 5 customers account for the bulk of consumption today and it will not change significantly

by 2028.4. Optics will continue to replace copper as speed of connections increases.5. Growth rate in bandwidth consumption will moderate from 50-100% per year today to 25-40%

in 2024-2028.6. Shipments of On-Board optics for mega DC (Cloud) applications will reach 300,000 units

(50% of this niche market) by 2023, as long as Microsoft remains committed to the project.7. Partnership of Facebook and Microsoft can launch a new market for co-packaged solutions.

10


Part 2: Drivers and Barriers

What is the motivation to move to more integrated modules? What are the benefits for customers? Why change?

10


Part 2: Drivers and Barriers

What is the motivation to move to more integrated modules? What are the benefits for customers? Why change?

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Why change?1. Very high volumes of optics: 100M units per year2. High speed and complexity: 100Gbps and above3. Multi-fiber connectors and multi-laser devices reduce reliability of optics4. Concentrated deployment patterns: very large DCs and clusters5. High power consumption limits scale of DCs

6. Interconnections with ASIC on-board becomes a problem at 200G signaling data rate7. Face plate port density is reaching limits

Yet, the industry is determined to keep using pluggable optics as long as possible.

New integrated solutions have to offer significant advantages to gain traction.

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Can Silicon Photonics (SiP) change the market?Moving from pluggable transceivers to highly integrated and co-packaged optics

Most of the optics is still there

SiP is used today to make pluggable, mostly 4-channel transceivers

The most advanced optics is getting here

Can the optics get to the next stage?

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Part 2: Conclusions Based on LightCounting interviews with the leading experts

The industry is not willing to change, at least not yet.

• The pluggable solutions are sufficient for the next 5-7 years, including 51Tbps switches• 50G signaling over copper on board is used now and it will support 100G per lane optics for

400GbE and 2x400GbE.• 100G signaling over copper on board works fine for a few inches with PAM4• 200G per lane optics can be accomplished with coherent DSPs• Liquid cooling can be used to resolve thermal management issues

• Keep on extending performance of existing technologies and using more power

However, demand for optics from Microsoft and Facebook is large enough to introduce new solutions.

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Part 3: Success factors and recommendations

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How to penetrate the market?Connections in Mega Datacenters is the largest market opportunity, but these very large systems are unlikely to use new, unproved technologies. Unless Facebook and Microsoft are willing to take this risk.HPC and AI clusters is a better option for entering the market. These systems are more open to innovation. FPGA chips may be the first to use co-packaged optics. Custom ASICs will be next.Large players like Broadcom, Cisco, Huawei and Intel are likely to lead in adoption of on-board and co-packaged solutions, but they could use new optical technologies and probably developing them now.Optics remains the limiting factor for innovation in switching ASICs. Broadcom would love to change it by taking full control of the situation. Co-packaged optics is a great solution to this problem.The best strategy for start-ups: work with a switch vendor.

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Part 4: Market Forecast

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Transceivers and Chiplets for the Top 5 Cloud CompaniesFirst optical chiplets will be deployed in 2023-2024, reaching high volumes in 2026-2028

-

5,000,000

10,000,000

15,000,000

20,000,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Unit

ship

men

tsEthernet transceivers to Chiplets

Chiplets consumed by Top 5 cloud (100m& 500m reach)Top 5 cloud ethernet transceivers (up to500 m)

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Adoption of chiplets starts with 400G, 500m reachMicrosoft remains committed to 400G COBO deployments

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Unit

ship

men

ts Transceivers

COBO

Opto-Chiplets

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800G and 1.6Tbps ChipletsThese will lag 400G by a year. No more COBO at these data rates

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Unit

ship

men

ts 800G Transceivers800G Opto-Chiplets1.6T Opto-Chiplets

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100m chiplets will lag 500m ones by a yearThe unit volumes for 100m are 30% lower

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Unit

ship

men

ts

400G, 500m transceivers to COBO and Chiplets (Top 5 Cloud only)

Transceivers

COBO

Chiplets

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Unit

ship

men

ts


Transceivers

COBO

Chiplets

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Unit

ship

men

ts

1.6T, 500m transceivers to COBO and Chiplets (Top 5 Cloud only)

Transceivers COBO Chiplets

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Unit

ship

men

ts



-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Unit

ship

men

ts



-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Unit

ship

men

ts

1.6T, 100m transceivers to COBO and Chiplets (Top 5 Cloud only)


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Optical Chiplets by Data RateThis also includes 30m reach Chiplets, which will be mostly 400G

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

2022 2023 2024 2025 2026 2027 2028

Unit

ship

men

ts

Chiplets: Shipments

400G 800G 1.6Tb

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Optical Chiplets by Reach100m reach will be a relatively low volume product as it replaces MMF transceivers

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

2022 2023 2024 2025 2026 2027 2028

Unit

ship

men

ts

30 m

100 m

500 m

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30m reach chiplets will replace 100G/400G AOCsand copper cables. 800G 30m chiplets will start shipping in volume by 2028 as well.

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Unit

ship

men

ts100G and 400G ACOs and Chiplets

1x100G AOC

4x100G AOC

400G chiplet (30m reach)

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Estimating Sales of Optical ChipletsHowever, many of these will be made internally by switch vendors and sold as part of switch ASIC (instead of being sold on a merchant market as optical chiplets)

$-

$1,000

$2,000

$3,000

$4,000

$5,000

2022 2023 2024 2025 2026 2027 2028

Anna

ul sa

les (

$ m

n)

400G 800G 1.6Tb

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Optical Chiplet Pricing ($/Gbps)30m pricing needs to be higher in 2023-2026, 500m also needs to be higher in 2023

Pricing for 100m and 500m reach chiplets is based on prices of optical transceivers.

Pricing of 30m chiplets is based on prices of AOCs.

0.25$/Gbps = $100 for a 400G, 30m reach optical chiplet.

0.4$/Gbps = $640 for a 1.6Tbps, 500m reach optical chiplet.

A 51Tbps switch ASIC will need 32 of 1.6Tbps optical chiplets. This will add up to $20,500 in chiplets cost (assuming 500m reach).

0.00

0.20

0.40

0.60

0.80

1.00

2024 2025 2026 2027 2028

ASPs

($/G

bps)

30 m 100 m 500 m

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Forecast SummaryThe Top 5 Cloud companies will lead in adoption of co-packaging solutions

All Other Cloud companies will follow the Top 5 with a 2 year lag.

The volume of shipments to “All Other Cloud” will be similar to the “Top 5 Cloud”.

High Performance Computers (HPCs) will be also important, but much smaller market opportunity for optical chiplets.

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

2022 2023 2024 2025 2026 2027 2028

Unit

ship

men

ts

Top 5 Cloud

All other Cloud

HPC

Thank You858 West Park Street � Eugene, OR 97401408.962.4851 � [email protected]

Entire document Copyright © 2019 LightCounting Market Research. No portion of this report may be reproduced in whole in or part without the prior written permission of LightCounting. Any written materials are protected by United States copyright laws. LightCounting offers no specific guarantee regarding the accuracy or completeness of the information presented, but the professional staff of LightCounting makes every reasonable effort to present the most reliable information available to it and to meet or exceed any applicable industry standards. LightCounting is not a registered investment advisor, and it is not the intent of this document to recommend specific companies for investment, acquisition, or other financial considerations.

market forecast for on-board and co-packaged optics...market for on-board optics (a.k.a. eoms) from...

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