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1. Driven by Data Center Business,
Silicon Photonics Industry
Enters Early Explosive Stage
Driven by Data Center Business, Silicon Photonics Industry Enters Early
Explosive Stage
——In-depth report of optical communication industry
At present, the silicon photonics market is not too big. It is estimated that
sales in 2015 will be less than 40 million US dollars. In fact, only a few
companies have begun to ship products in the open market. According to
market research company Yole Développements, the data center and several
other new applications will bring a multibillion-dollar market for silicon
photonics technology by 2025. Yole analysts pointed out that investment from
venture capitalists (VCs) and several start-up companies in these fields has
increased, showing that silicon photonics technology has reached the tipping
point before the forthcoming large-scale growth.

2. Silicon photonics technology is still in its infancy in the country. Future optical
communications vendors and semiconductor manufacturers are likely to
benefit from the industry outbreak. It is recommended to pay attention to the
optical device manufacturer Ascension Technology, China International
Equipment (to be acquired by Suzhou Xuchuang), etc.; semiconductor
manufacturers SMIC, Changjiang Electronics, and Tongfu Microelectronics. ν
Data center traffic growth pushes the internal chip level of the data center into
copper retreat: At present, the data center is mainly based on 40G and 100G
modules. Cisco data shows that data center traffic will reach 5 times in 2020,
and demand will drive data center to 200G and 400G. And other high-speed
transmission evolution. The 50Gb/s copper circuit is close to the limit of
transmission, and it is inevitable that the copper level at the chip level falls into
the copper.
Compared to III-V materials, silicon photonics technology utilizes CMOS
technology, which has cost advantages and is very promising in the future. ν

3. The difficulties in the development of the industry are gradually being broken
and may break out in the next two years: In the case of silicon-based lasers,
the hybrid products of III-V materials and silicon optical circuits have been
commercialized, and pure silicon lasers have already achieved laboratory
breakthroughs; The problem of the power consumption of light instead of
electricity was initially solved by IBM; both laid the foundation for the
commercial use of silicon photonics technology. We are optimistic about the
development of the industry. At present, Acacia 2016Q3 revenue reached
US$135 million, and SiFotonics silicon PD/APD chip has shipped nearly 1
million units. Intel announced in August that 100G silicon photonics module
was officially put into commercial use. The next two years will usher in an
outbreak of high probability.
YOLE predicts that in 2018, the global optical chip and its packaged device
market will reach 120 million U.S. dollars, and in 2024 it will exceed 700
million U.S. dollars, with a compound annual growth rate of 38%. ν The
stronger the properties of industrial electronics, the trend of downstream
customers entering the R&D manufacturing process: Si photonic technology
involves production links such as “design-manufacturing-encapsulation”. At
present, the entire industry has not yet formed a stable competitive

4. landscape. Chips and packaging are the core links. The advantages of silicon
photonics technology are even more evident in greater output and higher
transmission requirements. The properties of industrial semiconductors are
getting stronger and stronger. The input of electronics giants Intel, IBM, Cisco,
STMicroelectronics, NEC, and Huawei Hass will determine the speed of
development of the industry. There is a trend for downstream customers to
enter the middle and upper reaches of the manufacturing process. Huawei,
Facebook, Ciena and others also join the industry. ν Risk Warning: The
progress of silicon photonics technology research and development is less
than expected, and the risk of defeat in the competition with III races; IDC
business development is less than expected risks.
Yole Développement shared the latest findings in its research report “Silicon
Photonics for Data Centers and Other Applications”. The experts including
Eric Mounier, senior technology and market analyst at Yole, and Jean-Louis
Malinge, former chief investment officer at ARCH Venture Partners, and other
experts all conducted in-depth analysis of the silicon photonics industry. At
present, the silicon photonics market is not too big. It is estimated that sales in
2015 will be less than 40 million US dollars. In fact, only a few companies
have begun to ship products in the open market, including Mellanox, Cisco,

5. Luxtera. Intel, Intel, STMicroelectronics, Acacia and Molex are all leading
players in this market.
However, silicon photonics technology has continued to develop for many
years. Today, this technology is highly favored by large network companies
such as Facebook and Microsoft, and it is actively promoting it. "Silicon
photonics technology has reached the tipping point before large-scale
growth," said Eric Mounier. "In fact, we estimate that the transceiver market
encapsulated with silicon photonics technology will grow rapidly to a market
value of $6 billion in the next decade." Silicon photonics is an exciting
technology that combines optics, CMOS technology, and advanced packaging
technology. This combination is driven by the scalability of semiconductor
wafer fabrication, which can reduce costs. According to Yole, before 2020,
silicon photonics chips will far exceed the capabilities of copper wiring, and its
solutions are expected to be deployed in high-speed signal transmission
systems. In 2025 and beyond, this technology will be more widely used in
applications such as interconnected multi-core and processor chips. Yole
analysts believe that, at the chip level, this market is expected to reach 1.5
billion U.S. dollars by 2025.

6. Today, for silicon photonics technology, the data center is clearly its best
opportunity. Of course there are many other new applications that silicon
photonics can use, including high-end applications such as high-performance
computers, telecommunications, sensors, life sciences, and quantum
computing. In addition, there are two emerging applications that are also
particularly interesting for silicon photonics - Lidar for automated vehicle
applications, as well as biochemical and chemical sensors, both from
integrated optical functions and further Benefit from miniaturization.
Everbright is still a very expensive and cumbersome instrument, which poses
challenges when it comes to integration into vehicles. However, Yole expects
that in 2017, the ADAS market with development prospects will reach US$3.9

7. billion, of which, Guangda, based on silicon photonic technology, will play a
key role. In August of this year, the Photonic Microsystems Group of the
Massachusetts Institute of Technology (MIT) released a successful DARPA
program that uses silicon photonics to achieve controlled launch and receive
phase arrays and chip stacks ( Ge) Lidar-on-a-chip photodetector.
We are in front of a large-scale deployment Yole believes that the industry is
close to the critical point of large-scale deployment of highly integrated
devices around the world. Judging from the recent dynamics of semiconductor
foundry giants, such as the cooperation between TSMC and Luxtera,
GlobalFoundries and Ayar Labs have played an important role in promoting
silicon photonics business. STMicroelectronics is currently the main silicon
photonics manufacturer. In the development of "Zero-Change" zero change is
feasible, because the manufacture of silicon optical devices do not need to
change the CMOS process, which facilitates the creation of large-scale
market applications in the inter-chip optical interconnection field. Silicon
photonics was mature in the electronics industry as early as the 1980s, but
there are still some challenges to overcome in the optoelectronics industry.
These challenges require the technology to overcome the following:

8. 1. Light source: low cost, low speed <50Gb/s 2. Smaller Modulators: Cheaper,
Better Peak Drive Performance, Low Power Consumption 3, horizontal
packaging, wafer scale testing 4, design and software: optical software
customization and customization, 5, mature supply chain 6, manufacturing:
CMOS process zero change is a new trend.
2017-2021 Silicon Photonics Roadmap From data communications to other
applications In addition to the data center, silicon photons are also needed in
other areas. High performance computing usually refers to aggregating
computing power in a more performance-like manner than a typical desktop
computer or workstation can solve to solve problems in science, engineering,
or business. Due to the accelerated growth of microprocessor performance
and the recent emergence of chip multiprocessors (CMPs), key performance
bottlenecks in high performance computing systems have shifted from
processors to communications infrastructure. Therefore, by exploring the
parallel and capacity of wavelength division multiplexing (WDM) technology,
optical interconnects can provide higher bandwidth, low latency solutions and
solve the large bandwidth challenges of future computer systems. High

9. bandwidth capability, energy-saving transparency, and TOF delay can
maintain optical link memory system performance. .
The telecom market is also a potential market for silicon photonics, especially
metropolitan area networks ranging from 80km to 1500km. For example,
Acacia is developing carrier-grade silicon photonic modules. Coherent
technology was first deployed on long-haul networks, and Acacia's coherent
technology reduced polarization dispersion and loss, and also reduced the
channel band. Fiber to the home (FTTH) is also an indispensable application
scenario for silicon photonics, especially the second-generation Gigabit
optical network (GPON2). Silicon photonics can play an important role in
upgrading from FTTH 10G to 25G, because it has more required functions
such as wavelength tuning and switching. In other areas, sensors such as
biomedical devices and sensors; future vehicles will require higher levels of
safety, and their rapid response will require lower delays; silicon photonics is
also very attractive for radar applications, IMEC is developing related
technologies, and some R&D The project has been launched; in the case of
aerospace, the dimensional weight is as stringent as reducing power
consumption, and silicon photonics can be improved.

10. In addition, according to Yole's silicon photonics study, before 2025, the
application of these non-data centers will reach a market size of
approximately US$300 million.