Archive for Industy News

The global market for FTTx gptical components and modules will set for a second wave of growth in 2016-2020.

FWDM Chassis
Network operators in Hong Kong, Japan and Korea have connected close to 100% of their domestic residents with fiber and are starting to offer 1G and even 10G speeds. For a selected few customers, docking their yachts in Hong Kong’s harbors, 1 Gbps fiber to the yacht (FTTy) connections are now available. However today, 1G connectivity in itself is not a luxury. According to Amano-san of NTT, 1 Gbps connectivity today costs customers in Japan less than 10Mbps service did back in 2001. That is a factor of 100 improvement in speed and cost per Gbps over the last 15 years!

China leads the world in the total number of FTTx subscribers, which is expected to exceed 100 million by the end of 2015. The Chinese government’s latest plan calls for doubling the connectivity speed by the end of 2015, while reducing the end user’s cost by 40%. India and Indonesia are just starting to deploy FTTx, as their governments have approved very ambitious plans to bring fiber connectivity to even the smallest and most remote villages. “FTTz” as mentioned in the title, is not a real term, but it symbolizes extending fiber to every last resident of the region.
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Is Silicon Photonics a disruptive technology ?

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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. Our analysis suggests this will not happen in the next 5 years, but sales of SiP-based optical products may reach $1 billion by 2020, accounting for about 10% of the market.

As often happens with new technologies, product sales are starting to ramp up just as industry expectations start to fade, as illustrated in Figure (Typical trend for cross-correlation between industry expectation for new technologies and product sales) above.

It seems clear that several SiP suppliers demonstrated that this technology works. 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.
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The AOCs and EOMs market will go on to approach $850 by 2021

aoc-eom1Optical interconnects have long served as data bridges between elements of large systems or clusters, and they’ve taken many forms. Since 2000, embedded optical modules (EOMs) have supported supercomputers, core routers, and an array of other interesting and unique applications. Active optical cables (AOCs) arrived in 2007 as a practical, low-cost alternative to regular pluggable modules, and found a home primarily in high-performance computing (HPC) clusters. The market for AOCs and EOMs has really been a collection of niches, which has made it lumpy and large-order sensitive. For example, combined market revenues fell 17% in 2013, and then recovered by the same percentage in 2014. With such a lumpy and variable past, what does the future hold?

The analyst thinks the future for both AOCs and EOMs is bright, with the next two years marking a real departure from the past. They predict that the combined market will grow 48% to $262 million in 2015 and will go on to approach $850 by 2021. What is driving this change?
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Report: Data center switch market hits $12B in 2015

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2015 was another year of growth for the data center switch market, according to the most recent report. The firm reported that Ethernet, which accounts for the majority of data center switch revenues, grew 7% in 2015, and that InfiniBand revenues surged to a record year, surpassing its prior record of 2012.

In contrast with Ethernet and InfiniBand, Fibre Channel switch revenues declined slightly following growth in 2014, adds the new report.

In addition to the top-level performance of Ethernet, Fibre Channel and InfiniBand, notable results from Crehan’s data center switch report include the following:

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Report: Worldwide data center construction market booming

A new published report is titled “A Strategic Assessment of the Worldwide Data Center Construction Market  – Forecast Till 2021.” The report estimates the market to record a total revenue generation of approximately US$54 billion by 2021, growing at a CAGR of approximately 5 percent over the period from 2016 to 2021.

“One key factor that is contributing towards the growth of the data center construction market is the continual increasing demand for data storage,” notes the report’s executive summary. “A number of prominent organizations around the world are forced to add at least ten racks on a daily basis to their current data center storage capacity to accommodate the volume of data that needs to be stored. As such, with such a high volume of data, it is quite evident how absolutely necessary it is to have more data centers constructed as early as possible.

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Managing Change in Data Center Cabling and Systems

As the vital central nervous system of business operations, a data center must deliver solid, consistent performance from every system—network cabling, supporting infrastructure, climate control, monitoring and others. Yet at the same time, data centers are subject to frequent change and reconfiguration. As such, these environments must be both solid and dependable, while also being flexible to update or upgrade. This webcast seminar, produced by Cabling Installation & Maintenance, examines technologies and product characteristics that enable data centers to remain both dependable and flexible.

Presentation 1: Making Your Facility Seismic-Ready

A seismic event is one change a data center administrator never wants to have to manage; but for many, the possibility is an everyday reality. Additionally, data centers located outside of geographies typically associated with seismic activity are well-served to keep their equipment seismic-ready. This presentation focuses specifically on equipment cabinets, and how data center administrators can prepare them, to the extent possible, for a seismic event. It discusses cabinets that are built to be seismic-ready, as well as hardware that can be used to enhance existing cabinets’ seismic-preparedness.

Presentation 2: Cabling Performance Options for Multi-Generation Network Speeds

A data center cabling system is intended to support multiple generations of data transmission speeds, making it a more-permanent portion of the infrastructure than the network gear it supports. In order to truly support several generations of networking, the cabling must have sufficient bandwidth and throughput capacity. This presentation explains the capabilities of different optical fibers and fiber-optic cabling systems, and the extent to which these systems can support current and future transmission speeds.

Presentation 3: Design, Build and Test MPO-based Fiber Links for Higher Data Rate Applications

This presentation will cover best practices for building and commissioning high-speed fiber-based links in the data center, highlighting the differences between traditional methods and a new array of connector methods (MPO/MTP). Effective planning and specification (polarity, gender, loss budget, etc.) of parallel optics cabling for complex data center channels, and a detailed examination of polarity and gender issues that arise in link testing, will be discussed.

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Ideal Networks offers online quote builder for cable test hardware packages

OTDRIdeal Networks recently unveiled an online Quote Builder that the company says “enables network cable installers to easily select a cable certifier package that meets their specific job requirements, helping to drive down purchase costs.”

Tim Widdershoven, global marketing manager for Ideal Networks, describes the Quote Builder as “an easy-to-use visual guide that enables cable installers to make an informed buying decision” while building a tailored fiber optic tester solution. Widdershoven continued, “Previously, cable certifiers have only been available in bundles, which may include extra components or functionality that a customer will simply never use. Using our new Quote Builder function online, customers can pick-and-mix from various options to find a certifier that meets their specific requirements and budget in six simple steps.”

Users of the Quote Builder begin by choosing either a 500-MHz Category 6A or 1000-MHz Category 7A certifier, then adding adapters. Permanent link adapters can be used for testing cabling from the outlet to the patch panel, or channel adapters can be used to certify the entire link—including patch cords. Next, users select any fiber modules required, to add Tier 1 fiber-optic cable certification. Following that, accessories are added, such as calibration cables, coaxial adapters, or an industrial Ethernet kit if required. Finally, users select a 1-, 2-, or 3-year CarePlan. Once the user enters some basic contact information, the user receives a quote.

Ideal Networks further pointed out that one piece of fiber opitc test equipment users can specify via the Quote Builder is its LanTek III Cable Certifier (pictured). Introduced in December, the LanTek III is available in 500-MHz (Category 6A) and 1000-MHz (Category 7A) models. “For fiber cabling, the new FiberTek III modules can be added to the LanTek III-500 or LanTek III-1000 models to provide Tier 1 certification, eliminating the need for additional fiber testers,” Ideal Networks said.

Transceivers for mobile fronthaul to top $1 billion by 2020

Almost everyone supplying transceivers for fronthaul applications now knows that 2014 was a fantastic year, and that 2015 is a little soft in comparison. In spite of this, the investigators are predicting that the fronthaul optics market will resume growth in 2016, and reach over $1 billion in sales by the year 2020.

How can they be so sure?

First, because the market softness in 2015 is temporary. China Mobile deployed an astonishing 733,000 LTE basestations in 2014, but will only install 100,000 or so this year, partly due to a politically driven reorganization. China Telecom and China Unicom have ramped up LTE deployment now, but it’s not enough to offset the decline in China Mobile’s consumption. However, the LTE tide is still rising around the world and we believe initial deployments and capacity upgrades will increase demand for fronthaul transceivers steadily from now through 2020.

Second, the analysis of recent data on mobile traffic growth.

1-1Figure 1 – Network traffic growth rates

Figure 1 shows the Internet traffic growth overall, global mobile data traffic, and mobile traffic growth in China. The global mobile traffic is a composite of Cisco VNI and Ericsson Mobility Report data, while the data for China comes from the Chinese Ministry of Industry and Information Technology.

The traffic growth data shows just how dramatic the shift to mobile networks has been in the smartphone era, with mobile traffic growing at rates 20-25 points higher than overall Internet traffic. And the data from China is even more dramatic, showing a jump in traffic growth in 2015, following deployment of LTE by China Mobile the year before. Over the next five years the growth estimates range from 60% to 40% per year, meaning that mobile networks will have to carry seven times more traffic in 2020 than in 2015. And estimates of mobile data traffic growth have been increasing: Ericsson raised its estimated CAGR from 45% to 55% between its 2014 and 2015 Mobility Reports.

The investigator also use the traffic data to do a ‘sanity check’ on their forecast.
First they calculate the total cumulative bandwidth implied by our fronthaul forecast, and then they calculate the associated growth rates, and compare them to the traffic growth rates, as shown in Figure 2. You can see that our forecast growth rates for fronthaul bandwidth are lower than the traffic growth rates, and this is despite the fact that they are predicting significant use of 25G modules for fronthaul starting in 2018. So if anything, we feel our forecast is conservative.

1-2Figure 2 – Fronthaul bandwidth vs. mobile traffic growth rates

SYOPTEK has highly efficient production and international quality control system, hold strong R&D capability and first-class manufacturing process/test equipments, our passive optical components product line includes WDM, CWDM, DWDM, FWDM, optical isolator, optical circulator, in-line VOA, polarization maintaining optical products and connectors.

Strong finish expected for optical components in 2015

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Four times a year, the reseach team collects company financials and operating metrics from across the optical communications value chain, and they receive proprietary shipment data from more than 20 optical components vendors. They review the data, compare it to our existing forecasts, and tell clients what is happening in the market, in the form of a Quarterly Market Update.

The just-published September 2015 update reflects their analysis of financials and vendor shipment data through the first half of 2015, and industry news through Q3 2015. This graphic from the report summarizes the growth in service provider capex, and equipment and component vendor revenues, for 2Q 2015 compared to 2Q 2014.

It’s clear that telecom service provider capex fell off in the first half of 2015 compared to 2014, due to completion or tapering down of some large deployment projects around the globe, including China Mobile’s LTE deployment, Vodafone’s Project Spring, and Sprint’s Network Vision. Mega-datacenter operators on the other hand increased spending by 7%, which although positive, is smaller than the double-digit growth rates we are used to seeing for this group.

Equipment maker revenues grew a scant 2% and 4% in the datacom and telecom segments, respectively. ‘White box’ makers continue to make inroads in the datacenter equipment segment, while on the telecom side, Huawei’s and ZTE’s market shares gallop upward, and those of other incumbents languish. Pricing pressure continues to weigh heavily on revenue growth. Keen interest in Software Defined Networking and Network Function Virtualization may also be a factor in dampening equipment demand, as service providers take a breather to rethink their network plans.

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2Q15 sales growth among optical component companies was a little better than at the equipment level, with datacom up 10% and telecom up 7%. One of the main reasons for this is the growing adoption of 100Gbps components, which carry a higher price tag than slower speed devices.

The second chart (below) shows 2Q 2015 sales growth for the main product categories that we forecast. Ethernet and WDM are the two largest segments in terms of revenues, and both grew at a respectable/healthy rate. Optical interconnects continued to show rapid growth but are still a very small segment, totaling a little over $50 million in sales in 2Q 2015. FTTx also experienced high growth, driven by an acceleration of China’s broadband plans. The wireless segment on the other hand was down considerably, but that was to be expected given the extraordinary amount of LTE gear deployed by China Mobile in 2014.

They projected total optical transceiver market growth of 25% in 2015. Subsequently, some public optical components companies gave rather soft guidance for the balance of the year in their 2Q 2015 earnings calls, and political developments in China have called capex spending there into question. Based on our analysis of the most recent data and news, they have also decided to soften their outlook for optical components sales in 2015, but only to the extent of reducing our forecast growth rate from 25% to 15%. Even at this lower growth rate, full-year 2015 industry revenues should set a new record high, above $4 billion. One of the reasons They did not reduce the outlook more is that we are seeing private companies growing faster than the industry average and winning market share from the larger public vendors.