Archive for October 2016

Demand for optics in China and Cloud datacenters will sustain the market growth in 2017-2021


It is hard not to get carried away with excitement about the optics market in 2016. Demand is at an all time high. Strong growth in sales of 100G DWDM and 100GbE products made a lot of headlines this year and expectations for 2017 are high. However, analysis of the broader market for optical components and modules uncovers a few problems. Apart from DWDM and Ethernet optics, all other market segments are likely to remain flat or decline in 2016. This includes SONET/SDH, Fibre Channel, FTTx, wireless fronthaul and optical interconnects (AOCs and EOMs).

The total market for optical components and modules is expected to grow by 17% in 2016, with sales of DWDM and Ethernet products increasing by more than 30%. Massive deployments of 100G DWDM networks in China and 40GbE/100GbE optics in mega-datacenters by cloud-based companies are the main drivers of market growth this year and beyond, as illustrated in the figure below.

The total market for optical components and modules used in optical communications will grow at a CAGR of 10% in 2017-2021. Sales of optics to the cloud datacenter market will continue to grow rapidly in 2017-2021, averaging 20% annually.

The increasing contribution of China to the global market was related to its massive deployments of FTTx and wireless fronthaul optics in 2011-2015, but the situation has changed in 2016. This year it is demand for 100G DWDM and 100GbE optics that increased China’s share of the global market, and we think this trend will continue in 2017-2021.

The Market Forecast report provides a detailed market demand forecast through 2021 for optical components and modules used in Ethernet, Fibre Channel, SONET/SDH, CWDM/DWDM, wireless infrastructure, FTTx, and high-performance computing (HPC) applications. Key inputs include an analysis of the business and infrastructure spending of the top 15 service providers and leading Internet companies, and sales data from 2010 to 2016 for more than 30 transceiver vendors, including more than 20 vendors that shared their confidential sales information.

The rules should be remembered when you pulling fiber optic cable.

Installation methods for both wire cables and optical fiber cables are similar. fiber cable can be pulled with much greater force than copper wire if you pull it correctly. Just remember these rules:

1. Do not pull on the fibers, pull on the strength members only! The cable manufacturer gives you the perfect solution to pulling the cables, they install special strength members, usually duPont Kevlar aramid yarn or a fiberglass rod to pull on. Use it! Any other method may put stress on the fibers and harm them. Most cables cannot be pulled by the jacket. Do not pull on the jacket unless it is specifically approved by the cable manufacturers and you use an approved cable grip.

2. Do not exceed the maximum pulling load rating. On long runs, use proper lubricants and make sure they are compatible with the cable jacket. On really long runs, pull from the middle out to both ends. If possible, use an automated puller with tension control or at least a breakaway pulling eye.

3. Do not exceed the cable bend radius. fiber is stronger than steel when you pull it straight, but it breaks easily when bent too tightly. These will harm the fibers, maybe immediately, maybe not for a few years, but you will harm them and the cable must be removed and thrown away!

4. Do not twist the cable. Putting a twist in the cable can stress the fibers too. Always roll the cable off the spool instead of spinning it off the spool end. This will put a twist in the cable for every turn on the spool! If you are laying cable out for a long pull, use a “figure 8” on the ground to prevent twisting (the figure 8 puts a half twist in on one side of the 8 and takes it out on the other, preventing twists.) And always use a swivel pulling eye because pulling tension will cause twisting forces on the cable.

5. Check the length. Make sure the cable is long enough for the run. It’s not easy or cheap to splice fiber and it needs special protection. Try to make it in one pull, possible up to about 2-3 miles.

6. Conduit and Innerduct: Outside plant cables are either installed in conduit or innerduct or direct buried, depending on the cable type. Building cables can be installed directly, but you might consider putting them inside plenum-rated innerduct. This innerduct is bright orange and will provide a good way to identify fiber optic cable and protect it from damage, generally a result of someone cutting it by mistake! The innerduct can speed installation and maybe even cut costs. It can be installed quickly by unskilled labour, then the fiber cable can be pulled through in seconds. You can even get the innerduct with pulling tape already installed.

How to choose a right cable.

With so much choice in cables, it is hard to find the right one.

The table below summarises the choices, applications and advantages of each.

It will be helpful for you to choose a right one.

Cable type Application Advantages
Tight Buffer Premises Makes rugged patchcords
Distribution Premises Small size for lots of fibres, inexpensive
Breakout Premises Rugged, easy to terminate, no hardware needed
Loose Tube Outside Plant Rugged, gel or dry water-blocking
Armoured Outside Plant Prevents rodent damage
Ribbon Outside Plant Highest fibre count for small size

100GbE Optics is Starting to Light Up Cloud Data Centers, Setting Up Very High Expectations for 2017

Volume deployments of 100GbE optics in mega data centers have finally started. The second half of 2016 is expected to be strong and 2017 should be even better. Demand is high and suppliers are scrambling to keep up. Shortages of high-end optics, such as EML and DFB laser chips, is the main limiting factor for 100GbE market growth in 2016.

The demand for 100GbE in telecom is also very strong, as illustrated in the figure below. Shipments of CFP and CFP2 transceivers were ramping up for several years and large telecom customers, led by Huawei, have a tight grip on the 100GbE supply chain. Sales of 100GbE for telecom applications will continue to increase, but Cloud Datacenters are expected to become the largest consumer of 100GbE optics in 2017.

The main surprise of 2016 so far is a very high demand for 40GbE datacenter optics. Leading cloud companies reduced purchases of 40GbE transceivers in late 2015 and that trend was expected to continue this year. Sales data collected by LightCounting for the first half of 2016, released in the latest quarterly market update report, showed very strong sales of 40GbE products.

Supply shortages in 100GbE optics contribute to the continuing deployments of 40GbE in mega data centers. The success of 40GbE, which has been looked down on as an intermediate step from 10GbE to 100GbE, clearly illustrates the need for just such intermediate steps. History is likely to repeat itself with adoption of 400GbE, benefiting 200GbE optics, which many consider an unnecessary step along the way. LightCounting’s latest Ethernet forecast, released with the High-speed Datacenter Optical Interconnects report, increases our projections for 200GbE products in 2018-2021.

The updated report leverages extensive historical data on shipments of Ethernet and Fibre Channel interface modules combined with market analyst research to make projections for sales of these products in 2016-2021. The report offers a comprehensive forecast for more than 50 product categories, including 10GbE, 25GbE, 40GbE, 50GbE, 100GbE, 200GbE, and 400GbE transceivers, sorted by reach and form factors. It provides a summary of the technical challenges faced by 100GbE transceiver suppliers, including a review of the latest products and technologies introduced by leading suppliers. The report is based on confidential sales information and detailed analysis of publicly available data released by leading component and equipment manufacturers along with considerable input from industry experts, including many mega datacenter operators.