Optical Transceivers for Datacom & Telecom 2020

From Technologies to Markets
© 2020
Optical
Transceivers for
Datacom &
Telecom
Market and Technology
Report 2020
Sample

22
SCOPE OF THE REPORT 7
METHODOLOGIES & DEFINITIONS 8
ACRONYM REFERENCE GUIDE 9
COMPANIES CITED IN THIS REPORT 11
ABOUT THE AUTHORS 12
IMPACT OF COVID-19 & BASIS FOR OUR SCENARIOS 13
EXECUTIVE SUMMARY 16
FROM TELECOMMUNICATION TO FIBER-OPTIC COMMUNICATION 44
• Historical perspective
• Introduction to telecommunication (TELECOM)
• Introduction to data communication (DATACOM)
• Data Communication (DATACOM) vs. Telecommunication (TELECOM)
• Fiber-Optic Communication (FOC)
o Overview
o Principle
o Optical transmitter/receiver
o Optical transceiver
o Benefits over metallic-based communication
o Classification of technologies
FIBER-OPTIC COMMUNICATION NETWORK ARCHITECTURES 58
• Typical public fiber network architecture
• Generic diagram of FOC network
o Overview
o Focus on data center network
o Example of Facebook data center topology
o Focus on 5G transport network
• Network devices for telecom and datacom
FIBER-OPTIC COMMUNICATION APPLICATION TRENDS 65
• Global network IP traffic growth
o Macro-trends
o Analysis
o Drivers
• Datacom vs. Telecom
• Trends in data center
o Digital transformation
o Data traffic
o The case of video
o Network architecture
o Challenges
o Mega & Colocation mega data centers
o Highlights
TABLE OF CONTENTS 1/5
Optical Transceivers for Datacom & Telecom | Sample | www.yole.fr | ©2020

33
FIBER-OPTIC COMMUNICATION APPLICATION TRENDS 65
• Global IP traffic forecast
• Technical challenges - Shannon Limit
o Background
o Approaching it
o Handling it
o 5 physical properties for modulation and multiplexing
OPTICAL TRANSCEIVER MARKET FORECAST 84
• Total OT
o Shipments forecast by segment (2017-2025)
o Sales forecast by segment (2017-2025)
• Datacom OT
o Shipments forecast (2017-2025)
o Sales forecast (2017-2025)
o ASP forecast (2017-2025)
• Telecom OT
o Shipments forecast (2017-2025)
o Sales forecast (2017-2025) 1/2
o ASP forecast (2017-2025)
OPTICAL TRANSCEIVER INTRODUCTION 97
• Technology and trends
o Introduction
o Role of transceiver in networking
o Key technologies
o Key parameters
o Notations and terminology
• Introduction
• Form factor – Overview
• Form factor – Trends
• Suffixes for 100G OT and above - Overview
• Suffixes for 100G OT and above - Details
o Form factors
• Telecom - OT type by network connection
• Datacom - OT type by network connection
• Mapping by application and data rate
o Segmentation - Overview
o Segmentation - Multi-Mode vs. Single-Mode OT
o Key trends – Overview
o Key trends - Coherent technology/transceivers
o Silicon Photonics (SiPh) trend - Overview
o Silicon Photonics (SiPh) trend - Benefits
OPTICAL TRANSCEIVER APPLICATIONS 119
• Datacom trends
o Overview
o Focus on intra-rack interconnection
o Focus on inter-rack interconnection
o Focus on inter-DC interconnection
o Form factors - Interfaces used in datacenters vs. Data rates of OT
o Global trends - QSFP-DD & OSFP (400G & 200G)
o Global trends - QSFP56 & QSFP28 (200G & 100G)
o Status of migration to higher speed

44
OPTICAL TRANSCEIVER APPLICATIONS 119
• Telecom trends
o Focus on Metro Core / Metro Access interconnection
o Focus on 5G and Wireless Optical Transmission interconnection
o Global trends - SFP28/QSFP28/QSFP56
o Global trends – CFP/CFP2/CFP4
o Global trends – CFP-DCO and ACO (coherent vs. direct detect)
o Status of migration to higher speed
OPTICAL TRANSCEIVER TRENDS 136
• 400G and beyond
o Trends heading to 400G
o Drivers & Benefits
o Key applications
o New interface types and form factors to be deployed
o Datacom - 400G applications
o Datacom - 400G compatibility with legacy systems
o Telecom - 400G applications
o Telecom - Pluggable coherent ZR/ZR+
• Introduction
• Use cases
• Coherent optical transmission
• Form factors
• Cost effective architecture
• Technology outcomes
• Toward silicon photonics
OPTICAL TRANSCEIVER TECHNOLOGY 155
• Introduction - Key parameters in fiber-optic communication
o Introduction
o Overview of parameters
o Optical wavelength bands
o Bandwidth & reach/distance
o Single Mode Fiber (SMF) and Multi-Mode Fiber (MMF) - Description
o Single Mode Fiber (SMF) and Multi-Mode Fiber (MMF) - Modal Distortion
o Dispersion
o Modulation - Analog vs. Digital signals
o Modulation - Pulsed code modulation
o Modulation - Intensity modulation vs. Coherent modulation
o Modulation - Pulsed code modulation - RZ and NRZ
o Modulation - Pulsed code modulation - PAM4
o Modulation - Toward higher data rates
o Parallelization
o Multiplexing - Overview
o Multiplexing - TDM & WDM
o Multiplexing - Configuration of digital coherent optical transceiver circuit
o Multiplexing - Fixed grid vs. Flexible grid
o Forward error correction
o Highlights - Advances of optical transmission technologies in recent years
o Conclusion

55
OPTICAL TRANSCEIVER TECHNOLOGY 155
• Evolution along silicon switching
o Overview - Situation in data centers
o PAM4 technology impact on switch chip technology
o Trends
o Communication vs. Computing technology
o Disruptive improvements in silicon switches
• Fiber-optic communication scaling
o Background of network traffic
o Technology scaling differences
o Single-wavelength optical transceivers and coherent transceivers
o Client / Ethernet transceivers
o Fiber capacities of commercial WDM systems
o Outlook
• Conclusion
o Possible future speeds - Datacom and telecom
o Future - What shape will 800G ethernet take?
o Inside a DC
o Paving the way (Telecom)
OPTICAL TRANSCEIVER KEY COMPONENTS 202
• Introduction
• Laser diode
o 2 main types - EEL and VCSEL
o Wavelength and material choice
o Comparison of EEL (DFB & FP) and VCSEL
o Technology platform/type vs. Reach distance
o Uses case example - 100G data center
o Integration with InP optical modulator (for coherent emission)
o Trend of silicon photonics
• Photodiode
o Device types overview
o Photodetection principle
o Comparison of photodetectors
o Wavelength and material choice
o Integration with InP based mixers (for coherent detection)
• Toward Photonic Integrated Circuits (PIC)?
OPTICAL TRANSCEIVER INDUSTRY 221
• Introduction
• Mapping of key players (at transceiver level)
• Market shares
o 2017-2019 evolution - Datacom and telecom
o 2017-2019 evolution - Datacom
o 2017-2019 evolution - Telecom
• 2017-2019 revenue growth/decline for OT suppliers
• 2020 revenues trends
• Technology platform - Indium Phosphide (InP) vs. Silicon Photonics (SiPh)

66
OPTICAL TRANSCEIVER INDUSTRY 220
• Recent Mergers & Acquisitions (M&A)
o Overview
o InP platform - II-VI acquired Finisar
o InP - Lumentum acquired Oclaro
o InP - Others
o Silicon photonics - Acquisitions of Cisco
o Silicon photonics - Others
• Supply chain
o Overview
o InP platform - The different models in DATACOM
o InP platform - The different models in TELECOM
o SiPh platform
• Strategy
o Positioning and level of integration of key OT players
o Disaggregation vs. Vertical integration
o Product portfolio of key suppliers
• Competition
o Key competitive factors
o Small players vs. Large players
• Cost aspects - Multi-mode vs. Single-mode transceivers 1/2
• Silicon photonic
o Transceivers suppliers
o Manufacturing aspects
• Focus on China
o Historical perspective
o Recent trends
• Global trends
• Trend with the 400G era
o 400G for DCI and coherent technology
o Transition aspects – Overview
o Transition aspects - Focus on PAM-4
o Transition aspects - Focus on 400GbE ecosystem
o Getting ready for the future
o Pluggable coherent 400ZR+ - Market opportunities
o Pluggable coherent 400ZR+ - Players positioning
APPENDIX 270
• Glossary
• OSI Model
• Fiber-optic communication network evolution
• Fibre channel
• Infinband

77
Optical
Communication
Datacom
Telecom
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88Optical Transceivers for Datacom & Telecom | Sample | www.yole.fr | ©2020
METHODOLOGIES & DEFINITIONS
Market
Volume (in Munits)
ASP (in $)
Revenue (in $M)
Yole’s market forecast model is based on the matching of several sources:
Information
Aggregation
Preexisting
information

99
Acacia Communication,Accelink,Adtran,ADVA,Alibaba,AmazonWeb services,Apple,Applied
optoelectronics Inc (AOI),Arista,ATOP,AZ by CyrusOne, Baidu , Broadcom, ChampionONE, Ciena
(Cyan), Cisco, ColorChip, Dell, E.C.I. Networks, Ekinops, Emcore, Eoptolink, Facebook, Fiberhome,
Finisar (now II-VI), Foxconn InterconnectTechnology (FOIT), Fujitsu Networks, Fujitsu Optical
components, Gigalight, Google, HG Genuine Optics, Hisense Broadband, Huawei, Huawei,
HUBER+SUHNER Cube Optics AG, IBM+Softlayer cloud services , II-VI, Infinera (Coriant,Transmode),
InnoLight, Inphi, Intel, IPG Photonics (Menara Network), J.P. Morgan, Juniper Networks, Lumentum,
Macom, Mellanox, Microsoft, NEC, NeoPhotonics, Nokia (Alcatel Lucent), NTT Electronics, Oclaro, OE
Solutions, Oplink (MOLEX), Padtec, Rackspace , Ranovus, Renesas (Integrated Device Technology),
Rockley Photonics, Sicoya, Skorpios technologies, Source Photonics, ST, Sumitomo,Tencent,Verizon ,
Xtera,Yahoo, ZTE and more…
COMPANIES CITED IN THIS REPORT

1010
MartinVallo
Dr Martin Vallo is a Technology & Market Analyst specializing in solid-state lighting technologies, within the Photonics, Sensing & Display division at Yole Développement (Yole).
With 9 years’ experience in semiconductor technology, Martin is currently involved in the development of technology & market reports as well as the production of custom
consulting projects at Yole.
Prior to his work at Yole, Dr Vallo worked at CEA (Grenoble, France), with a mission focused on the epitaxial growth of InGaN/GaN core-shell nanowire LEDs by MOCVD
and their characterization for highly flexible photonic devices. Martin graduated from Academy of Sciences, Institute of Electrical Engineering (Slovakia) with an engineering
degree in III-nitride semiconductors.
Pars Mukish
Pars Mukish holds a master’s degree in Materials Science and Polymers from ITECH in France and a master’s degree in Innovation and Technology Management from EM Lyon,
also in France. He works at Yole Développement, the ‘More than Moore’ market research and strategy consulting company, as senior market and technology analyst in the
fields of LED, OLED, lighting technologies, and compound semiconductors, He performs technical, economic, and marketing analyses. In 2015, Pars was named business unit
manager for emerging sapphire, LED/OLED, and display/lighting activities.
Previously, he worked as marketing analyst and techno-economic analyst at CEA, a French research center for several years.
ABOUT THE AUTHORS
Biographies & contacts
Contact: martin.vallo@yole.fr
Contact: pars.mukish@yole.fr
Contact: eric.mounier@yole.fr
Dr. Eric Mounier
With more than 20 years of experience in MEMS, sensors and photonics applications, markets, and technology analyses, Eric provides deep industry insight into
MEMS and photonics current and future trends.
He is a daily contributor to the development of MEMS and photonics activities at Yole, with a large collection of market and technology reports as well as multiple
custom consulting projects: business strategy, identification of investments or acquisition targets, due diligences (buy/sell side), market and technology analysis, cost
modelling, technology scouting, etc.
Eric has contributed to more than 250 marketing/technological analyses and 80 reports, helping move the MEMS and Si photonics industry forward. Thanks to his
extensive knowledge of the MEMS, sensors, and photonics-related industries, Eric is often invited to speak at industry conferences worldwide.
Moreover, he has been interviewed and quoted by leading media throughout the world. Prior to working at Yole, Eric held R&D and Marketing positions at CEA
Leti in France. Eric has a Semiconductor Engineering degree and a Ph.-D in Optoelectronics from the National Polytechnic Institute of Grenoble.

Impact of COVID-19 &
Basis for our scenarios

1212
• The COVID-19 has deep implications for the telecom infrastructure supply chain. The disease is affecting China and is
spreading within Asia and into Europe and North America – the most important markets wherein the datacom and telecom
technologies have been heavily deployed.
• End users spending on IT infrastructure (server and enterprise storage systems) will decline in 2020
• Interesting situation is in optical networking market. Demand for networking and cloud services is huge today. Due to
sanitary confinement people work and communicate from home as well as take advantage of digital entertainment
connected to the internet. Telecom networks and data centers will continue to operate while most of the manufacturing
and travelling businesses are shutting down. Network and datacenter operators will try to maintain high bandwidth for
storage and streaming services and continuously working on enhancing network capacity.
• Demand for optics by Chinese data-center operators (Alibaba, Baidu, Bytedance, Tencent, …) is very strong with the
Chinese government support for deployment 5G and cloud data centers. That means the future scenario for optical
communication sector doesn't have to end badly if manufacturing of optical systems and module restart in 3 months and
Chinese consumers will continue subscribing cloud services this year.
• In conclusion, we assume different negative impact on telecommunication infrastructure systems. Elements of the impact
include changing demand expectations from the buyers, supply chain shortages and logistical delays, short-term component
price increases, and a suppressed economic and social climate. Even though a demand for bandwidth is high, the optical
communication industry will be negatively impacted in sales due to less investing to the legacy infrastructure instead of
higher investing to the new ecosystems.
ECONOMIC OUTLOOK
Initial statements

1313
Server and Enterprise Storage Systems
• Middle case / Best case
• How long this recession will last is also unclear now.
• The current probable scenario server market revenues will decline 4-6% year over year
• The enterprise storage systems market is expected to decline 5-7% year over year
• The both servers and storage systems return to growth in the second half of the year
Optical networking systems and modules for datacom and telecom
• Middle case / Best case
• How long this recession will last is also unclear now. Difficult to predict the economic situation in the
next 3-6 months.
• The downturn in optical networking and transceiver sales should be short time. We expect that it will
be followed by a very strong recovery, given the new urgency for adding bandwidth across the
networking infrastructure.
• The optical transceivers market is expected to decline >10% in Q1 and <8% in Q2 due to slow restart
manufacturing in China.
• Demand continues to be solid, we expect that unfulfilled Q1 and Q2 demand will be shipped in
subsequent quarters.
BASIS OF OUR SCENARIOS

OPTICAL TRANSCEIVER MARKET – ANALYSIS BY APPLICATION
Optical transceiver market revenue forecast by segment (2019 vs. 2025)
$3.7B
$4B
2025
$17.7B
2019
$7.7B
Datacom
Telecom
$5.6B
CAGR 7%
$12.1B
CAGR 20%

1515
• Data communication refers to the transmission of information between two or more points mostly using fiber glass as a communication
channel and some specific form (set of 0’s and 1’s) understandable to that channel. In this report data communication are linked with the
datacenters and typical transmission distance is up to 100km (DCI).
• Data communication system ensure:
• Delivery: The system must deliver data to the correct destination. Data must be received by the intended device or user.
• Accuracy: The system must deliver data accurately. Data that have been altered in transmission and left uncorrected are unusable.
• Timeliness: The system should transfer data within time. Data becomes useless if it is delivered late. In case of video, audio and voice data, timely delivery means
that data is delivered as it is produced.This type of delivery is called real-time transmission.
• Telecommunication is the transmission of signals over a distance for the purpose of communication. In modern times, this process almost
always involves the use of electromagnetic waves or optical fibers by transmitters and receivers.
• Telecommunication term defines any assisted transmission. It could be telephone, telegraph, radio,TV, even smoke signals.
• Telecommunication system consists of three elements:
• A transmitter that takes information and converts it to a signal;
• A transmission medium that carries the signal;
• A receiver that receives the signal and converts it back into usable information.
Data CommunicationVs.Telecommunication
• They are both a form of communication;data communication is a subset ofTelecommunication
• Telecommunication sends data between two links by means of electromagnetic. (Like satellite), while data communication means send data by
telecommunication, it consists of codes of 0’s and 1’s.
• In computer means, data communication is digital data and telecommunication is equipped to send digital data to receiver.
• Telecommunication is any communication over a distance. Data communication usually implies digital, and often excludes voice services.
FROM TELECOMMUNICATION TO FIBER-OPTIC COMMUNICATION
Data Communication (DATACOM) vs.Telecommunication (TELECOM)

FIBER-OPTIC COMMUNICATION NETWORK ARCHITECTURES
Generic diagram of FOC network - Overview
Telecom networks
Long-haul networks
Datacom networks
*5G network andWireless access network is not part of datacom network
*Source: NTT
WDM systems
LAN
SONET/SDH
FTTx
5G
5G networks
LONG-HAUL
• High performance
• Fiber constrained
METRO
• Space and power
constrained
• Pay as you grow model
EDGE
• Shorter product life
cycles
• Cost and power sensitive

17
FIBER-OPTIC COMMUNICATION APPLICATION TRENDS
Global network IP traffic growth - Macro-trends
The trend is
accelerating the
increase in the
average number
of devices and
connections per
household and
per capita.
2018
2023
6.1B
~18.4B
~29.3B
CAGR 10%
14.7B
Global device and connection growth
(Market share 2018 → 2023)
Other (2% → 4%)
Tablets (4%→3%)
PCs (7%→4%)
TVs (including game consoles) (13%→11%)
Non-Smartphones (14%→5%)
Smartphones (27%→23%)
Machine-to-Machine (M2M) (33%→50%)
4.8B
6.7B2.7B
1.6B
2.4B
3.2B
1.4B
1.2B
0.7B
0.8B
0.4B
1.1B
(Source: Cisco Annual Internet Report)
• Each year,
various new
devices with
increased
capabilities and
intelligence are
introduced and
adopted in the
market.
• The average
number of
devices and
connections per
capita will grow
from 2.4 in 2018
to 3.6 by 2023

18
FIBER-OPTIC COMMUNICATION APPLICATION TRENDS
Datacom vs.Telecom 1/2
The driver
applications of
the fiber-optic
network are
lagerly digital
applications
and services.
Digital optical communication
Telecom
Datacom
Datacenters
Metro access
<100 km
Metro core
100 – 800 km
Long haul
>800 km
• New era of connectedness is increasingly universal
• The capacity of the digital communications networks must increase exponentially
• More than 20 billion connected devices and machine learning and artificial
intelligence will continue to accelerate this trend
The rapid rise of internet
traffic that is going through
mega data centers operated
by hyperscalers.
Deployment of modern communications has rapidly expanded from being the
domain of telecom service providers to deployments by enterprises and
service “mega” data center enterprises.
Wireless - 5G

19
OPTICAL TRANSCEIVER MARKET
TOTAL OT shipments forecast by segment (2017-2025)
The OT market
is expected to
grow from 183
Munits in 2020
to 211 Munits
in 2025, mostly
driven by
Ethernet optical
modules.
CAGR2020-2025 =
+6%.
• Although the total shipments in 2020 can decrease up to 15% in the worst scenario, the total revenue is expected
to moderately increase. It is a result of much more expensive optical modules above 100G of data rate. However
the operation costs - price for transmission of 1G/s is rapidly decreasing.

20
OPTICAL TRANSCEIVER MARKET
DATACOM OT revenues forecast (2017-2025) 1/2
The OT market
for Datacom is
expected to
grow from
$4.2B in 2020
to $12.1B in
2025.
CAGR2020-2025 =
24%.
• The Datacom market
growth will be driven by
adoption of expensive higher
data rate optical modules
which migrate from
core/spine networks down
to inter-rack connections.

OPTICAL TRANSCEIVER INTRODUCTION – TECHNOLOGY &TRENDS
Key technologies
Details of Chip components - laser and photodiode are available in the chapter OpticalTransceiver Components
Components
Scheme
Technologies
Chip Optical Sub-Assembly Transceiver
Bill of materials

2222
10G-25G 40G 200G100G 400G
Form factors - Mapping by application and data rate
LONG-HAULMETRO
Core
METRO
Access/Inter
DC
METRO
Access/5G
LAN/
Intra DC
SFP
QSFP
XFP
SFP28
CFP2-LR/ER CFP4-LR/ER
TelecomDatacom
100 – 800 km > 800 km10-120 km<10 km
CFP-DCO
5”x7”
module CFP2-ACO
CFP2-DCO
OSFP/QSFP-DD
ZR/ZR+
4”x5”
module
CFP8-LR
SFP+
QSFP28 –
SR/DR/FR/
CWDM/PSM
QSFP+
QSFP56 –
SR/DR/FR
QSFP-DD
OSFP – SR/DR/FR
QSFP-DD
OSFP – LR/ZR
QSFP56 –
LR/ER
QSFP28–
LR/ER/LWDM

23
Key trends - Coherent technology/transceivers
The coherent
technology is
consider as a
most advanced
but also most
expensive
technology
today.
The MM, SM and coherent transceivers have been driven by scaling of various electrical and optical technologies.
Multi mode transceiver Single mode transceiver Coherent transceiver
Application
Laser
source
Modulation
Reach
Short reach (hyperscale DC,
enterprise, storage)
Long reach (hyperscale DC) Long reach (Telecom)
VCSEL
850 nm
xxx xxx
xxx NRZ, PAM4 xxx
3 m – 100 m xxx > 10 km
Advantage/
Disadvantage

Silicon Photonics (SiPh) trend - Benefits
• Smaller photonic components:
Size matters when we talk about device integration into
sub-systems. As an example, for sensing applications, optical
technology has the highest sensitivity but lacks of
miniaturization because most of the time hybrid dies need
to be assembled together and long optical path is required
(thus the optical module is often bulky). So, photonic offers
the best combination of high accuracy and long lifetime and
further integration opens the way to portable systems for
consumer applications.
• Lower power consumption:
Data centers are extremely power-hungry and will
consume a significant fraction of the world electricity if no
technology shift occurs. Photonic proposes lower energy-
consumption solutions that could be turned into reduced
heat dissipation, lower environmental footprint and lower
operating costs. In a previous Yole report (2015 Data
Centers), we shown Si photonics interconnects could
reduce power consumption by 5-10%.
• High data rates:
Here again, data rates are increasing in data centers as we
are heading to 400Gb/s. Direct Attach Cable with Copper
is limited to 30m and 10Gb for intra data center
interconnects. For longer distance and data rate, InP and Si
photonics are used. For example, Infinera ICE5, announced
only 24 months after ICE4, delivers a significant leap in
capacity per wavelength, from 200G to 600G, and offers
improvements in fiber capacity, reach and power efficiency
to address the most demanding high-scale applications.
• Lower $/Gbps:
In 2015, Facebook specified a 100G transceiver using
single-mode fiber it believes it can drive to a cost of $1/GB.
This $1/Gb limit has been one of the cost target of the last
years for the optical transceivers community. To hit the
lower costs, the tech giant relaxed distance requirements
to 500m down from 2km and eased specs on operating
temperature and product lifetime. Today, with an average
selling price of $200 for a 100Gb transceiver, we are at
$2/Gb. Si photonics can leverage the benefits from the IC
manufacturing industry to lower the costs down.
• Leverage semiconductor industry:
Manufacturing PICs is taking benefit
from the batch manufacturing of the
IC industry thus lowering cost down.
• Better reliability:
Compared to legacy optics with
hybrid integration.

25
OPTICAL TRANSCEIVER APPLICATIONS – DATACOMTRENDS
Status of migration to higher speed
Due to the
ongoing large
increases in
bandwidth
demand, Data
Center
connections are
expected to move
from 25G/100G
to 100G/400G
Within the data center racks
2017 20182015 2016 2019 2020 2021
10G
25G
100G
40G
100G
400G
Between data center racks
Data Center Interconnect &WAN
10G DWDM withTunable laser
100G/200G Coherent
400GE & Coherent
Volume ramp
Starting to
be deployed
Being deployed
Starting to
be deployed
Being deployed
Being deployed
Starting to
be deployed
Volume ramp
Starting to
be deployed
Future
Volume ramp
Volume ramp
Volume rampStarting to
be deployed
Starting to
be deployed
Volume ramp
800GStarting to be deployed
Source: Finisar
• Rapid evolution of DSPs for optical
communication technologies shorten
life cycle of the single mode and the
multimode optics used in the data
centers.

26
OPTICAL TRANSCEIVER TRENDS – 400G AND BEYOND
New interface types and form factors to be deployed 1/2
New form
factor
standards are
emerging for
all types of
interconnecti
ons
CFP8
• 1st generetion 400G form
factor
• Applications: metro core
routers and DWDM client
interfaces
• Slightly smaller than CFP2
• Support
• CDAUI-16 16x25G NRZ
• CDAUI-8 8x50 PAM4
QSFP-DD and OSFP
• 2nd generetion 400G form factors

27
• Coherent modules
significantly larger
than their intensity
modulated
counterparts
• Need for powerful
digital signal
processors and the
use of discrete
optical components.
• Targeted long-haul
applications
OPTICAL TRANSCEIVER TRENDS – 400G AND BEYOND
TELECOM - Pluggable coherent ZR/ZR+ - Coherent optical transmission 2/2
With rising
data demand,
data center
operators are
seeking a low
power, small
form-factor
solution to
cover edge-
DCI distances.
DCO/ACO → 400G ZR → 800G ZR
• Advances in CMOS
• Integrated optics
• Coherent digital
signal processor
(DSP) designs
• DSP coding and
equalization
algorithms
Past Today (ZR)
industry efforts to deliver a viable coherent solution
Future (800G)
These modules will provide the necessary bandwidth increases for the regional or metro networks
for the mega-DC operators such as Google, Microsoft,Amazon, Facebook, and many others.

28
OPTICAL TRANSCEIVER TECHNOLOGY - KEY FOC PARAMETERS
Overview of parameters
This chapter will
provide the
reader with a
rudimentary
understanding of
inevitable fiber
optic
communication
parameters and
their impact on
today’s trends.
Optical wavelength bands Bandwidth SMF/MMFReach/Distance
Dispersion Modulation Multiplexing Parallelization

29
OPTICAL TRANSCEIVER TECHNOLOGY - CONCLUSION
Possible future speeds - Datacom & Telecom
Heading
toward higher
speeds the
range of form
factors should
be reduced to
maintain
compatibility.
Source: Ethernet Alliance
Now
100G/200G/
400G
Top cloud
data centers
Rest cloud
data centers
Large
enterprises
Rest of
enterprises
Services
Provides
(Telecom)
2025
800G/1.6T
100G 800G
100G/400G
100G 400G
100G/400G 1.6T
800G/1.6T

30
OPTICAL TRANSCEIVER TECHNOLOGY - CONCLUSION
Paving the way (Telecom) 1/2
The idea concept
is to use the same
100G/200G/400G
pluggable digital
coherent optics
(DCO) module
across all
distances.
• New coherent pluggable modules QSFP-DD, OSFP and CFP2-DCO will drive a paradigm shift in how DCI is deployed by cloud and
telecom service providers, enabling high-density IP over DWDM on switch and router platforms that also have the performance
required for metro and long-haul networks.
DR4, FR4,
400G
CWDM
QPSK/8QAM/16QAM (400G ZR/ZR+)
Coherent
Pluggable DCO/100G/200G/400G
DWDM
Inside DC DCI (Any distance)
10 km5 m 800 km 10 000 km2 km 100 km
Distance
PSM4, LR4,
CWDM4
100G
CWDM
PAM4 (100G, QSFP-DD)
Coherent
100G/200G/400G/600G
DWDM
QPSK/8QAM/16QAM
Coherent
100G/200G/400G
DWDM
QPSK/8QAM
Coherent
100G/200G/300G
DWDM
Inside DC DCI (Metro Access) DCI (Metro Core) DCI (Long Haul)
10 km5 m 800 km 10 000 km2 km 100 km
Distance
Past
1. Coherent DSP ASICs have been designed for dedicated
transport boxes.The power consumption and package
size had not been sufficiently optimized for QSFP- DD
or OSFP.These boxes add cost and dissipate power.
2. Lack of Interoperability across generations of coherent
solutions for 100G and 200G.
3. Lack of a clear application space, as the conventional
coherent technology had been deployed in many forms
across various distances and optical fibre span
configurations.
Future
• Development of an industry-wide ecosystem
that supports pluggability and a new era of
interoperability for 400G.
• The ecosystem based on ZR will enable telecom
and cloud providers to not only deploy solutions
for DCI edge applications up to 120km but also
use the same 100/200/300/400G solutions across
the entire DCI infrastructure.

31
VCSELDFB FP
–++
+ ++–
++
+++ –
++ ++
+
AlGaAs/AlAs
InGaAsN/GaAsInGaAsP/InP InGaAsP/InGaP
– –
–
OPTICAL TRANSCEIVER KEY COMPONENTS
Laser diode - Comparison of EEL (DFB & FP) andVCSEL
Different laser
diode
technologies
are present in
optical
communication
sector
depending on
transmission
distance and
speed.
xx
Mbps
xx
Mbps
xx
Gbps
xx
Gbps
xx
Gbps
xx m
xx m
xx km
xx km
xx km
1.3 µm DFB
Single Mode
1.3 µm Fabry-Pérot
Single Mode
850 nmVCSEL
Multi Mode
1.55 µm
DFB
Single Mode
Externally
Modulated
850 nm LED
Multi Mode
PAROLI*
Multi Mode
Multiple
Fibers
*PAROLI = Parallel optical link
Transmission Speed
TransmissionDistance

3232
• Event though much higher ASP of telecom optical transceivers (coherent technology or outdoor graded), revenues from
datacom dominated recent years due to deployment of high volume ethernet transceivers and AOCs for cloud builders,
large enterprise and HPC centers
• Splitting market into datacom and telecom is becoming more blurred as metro networks which were typical telecom before
are more attractive for interconnections of data centers. If the coherent technology will go down in cost and thus become
feasible to be implemented in data centers we won’t be able to distinguish technologies addressing datacom and telecom
markets.This segmentation can disappear.
OPTICAL TRANSCEIVER INDUSTRY
Market shares - 2017-2019 evolution - DATACOM & TELECOM 3/3
Datacom
(revenue)
XX%
Telecom
(revenue)
XX% Datacom
(revenue)
XX%
Telecom
(revenue)
XX% Datacom
(revenue)
XX%
Telecom
(revenue)
XX%
201920182017

Market shares - 2017-2019 evolution - TELECOM 1/2
Total
2019:
$x.xxB
Total
2018:
$x.xxB
Total
2017:
$x.xxB
x% x%
2017 2018 2019

34
Technology platform - Indium Phosphide (InP) vs. Silicon Photonics (SiPh)
The InP
platform and
Silicon
Photonics will
coexist in the
future.
Silicon Photonics – SiPhIndium Phosphide – InP

3535
• In recent years we saw the strategical
investment of the market leaders to
strengthen their positions.
• In spite of consolidations the market
is still very fragmented. Many
companies compete and there is no
single or small group of companies
which dominate the market.
Future:
• We expect aggregate merger and
acquisitions activity to be related to:
• Technology expertise
• High volume production and low cost
to meet mainly hyperscalers
expectations
• Strengthening the position in the region
– China or USA
Mergers & Acquisitions (M&A) – Outlooks
Hyperscalers,Cloud builders,Enterprises,HPC centers
(Customers)
Optical modules vendors
(Suppliers)
Disaggregated
supply chain
Vertically
integrated

36
Strategy - Product portfolio of key suppliers
Different
strategies is
also projected
into the
product
portfolio and
segment
interest.
DATACOM TELECOM
Ethernet
Fibre
channel
Infiniband AOCs
SONET/
SDH
CWDM/
DWDM
5G &
Wireless
Bidi
Access
Coherent
High Speed
Components
II-VI (+Finisar)
Lumentum (Oclaro)
Foxconn InterconnectTechnology (FIT)
HG Genuine Optics
Accelink
Sumitomo
InnoLight
Source Photonics
Cisco (Acacia)
Fujitsu Optical components
MOLEX (Oplink)
NeoPhotonics
Macom
HUBER+SUHNER Cube Optics AG
NTT Electronics
Not in portfolioIn portfolio

37
Trend with the 400G era –Transition aspects – Focus on PAM-4
Broadcom and
Inphi are two
large and
trusted
suppliers of
400GbE PAM-4
silicon – both
trying to offer
customers a
differentiated
solution.
In the past Today
• Completing 400GbE ecosystem from different
suppliers should guarantee a competitive
supply chain for 400GbE module makers
trying to ramp production at the end of 2019
• Integrating retimers into the optical
transceiver modules is an intermediate
step to SiPh
I. PAM-4
100GbE 400GbE
$250 – $400 $3,500 – $10,000 < $3,000
400GbE
2017/2018 2019/2020

38
Trend with the 400G era – Pluggable coherent 400ZR+ – Players positioning
Plenty of
companies are
investing
$500M in
total to bring
400ZR to the
market.
DSP (TROSA) Optical module Level of integration
- - QSFP-DD/CFP2-DCO Vertically integrated
- - QSFP-DD -
Yes - - -
Yes - - -
- - - Vertically integrated
- - QSFP-DD -
Yes - - -
- - QSFP-DD -
No - - -
Yes - - Component manufacturer
- - - Telecom modules manufacturer
- - - Vertically integrated
- - QSFP-DD -
Yes - - -
- - - -
Ciena, Infinera,Acacia,
and Inphi are planning
a fully vertically
integrated strategy to
cover the broadest
possible market reach
As component
developers repurpose
their designs to
address adjacent
markets, more and
more companies are
beginning to endorse
some form of 400ZR
in their future
roadmaps.

39
Contact our
SalesTeam
for more
information
39
Contact our
SalesTeam
for more
information
InPWafer and Epiwafer Market
– Photonic and RF Applications
VCSELs – Market and
TechnologyTrends 2019
Silicon Photonics 2020
GaAsWafer and Epiwafer Market:
RF, Photonics, LED, Display and PV
Applications 2020
Edge Emitting Lasers: Market
andTechnologyTrends 2019
YOLE GROUP OF COMPANIES RELATED REPORTS
Yole Développement

40
Contact our
SalesTeam
for more
information
40
Contact our
SalesTeam
for more
information
Intel Silicon Photonic 100G
PSM4 QFSP28 Transceiver
Intel Silicon Photonic 100G
CWDM4 QFSP28 Transceiver
YOLE GROUP OF COMPANIES RELATED REPORTS
System Plus Consulting

41About Yole Développement | www.yole.fr | ©2020
CONTACTS
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+33 4 72 83 01 80
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+1 208 850 3914
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› Jérome Azémar, Yole Développement -
jerome.azemar@yole.fr - +33 6 27 68 69 33
› Julie Coulon, System Plus Consulting -
jcoulon@systemplus.fr - +33 2 72 17 89 85
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camille.veyrier@yole.fr - +33 472 83 01 01
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