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Optical Communication Manufacturer Should Make Active Transformation toward Data Communication Field

Author: SOPTO

1/3/2014, 2013 was a difficult year for many optical communications enterprises, with China Telecom, China Mobile and other operators strengthening their investment in 4G/LTE, the large-scale construction of wireless broadband infrastructure stripped cable investment, in China Telecom had already used annual quota of FTTH in the first half of the year, with the background of many domestic enterprises crying piteously for food, transformation? Upgrading? Giving up or sticking? This is a very real problem.

•Data communication outshines.

Viewing of the global optical communication market of 2013, Telecom market is dull, and even can be said that it is having its hibernation; on the other hand, data communications market performance has exceeded our expectations. Report from Lightcounting shows that, in the field of data communication, not just 40Gig and 100Gig, even 10Gig growth was faster than expected. Shipments of 10GbE module in 2013 were more than 1GbE. The main reason for this is connected to growing demand of data center “trunk and branches (Spine and Leaf)” switch architectures need more connection between frame and the aggregation switch.

As bearer of massive data, data center has become the core of computing, storage and flow injection. With the development of Internet, mobile Internet, cloud computing, data and application, the importance of data center is increasingly prominent. At present, China data center industry is developing rapidly, according to relevant statistics, in 2012 China IDC market size has reached 21.05 billion RMB, the growth rate reached 23.2%; estimated that by 2015, the market scale will reach 50.23 billion RMB. IDC Research Report indicates, 2012 China data center market total investment reached 11.93 billion dollars; mid-large data centers with more than 500 square meters area have been more than 4000, accounting about 8% of total, its investment scale accounts about 50% of total.

Although this field is leading market growth of 2013, there have seldom China optical devices business involved in the field of data communication, most data communication optical fiber transceiver is based on VCSEL technology, but this technology is mainly composed by Finisar. Transition towards 10GigE and 40GigE data center is driving the demand growth for optical fiber transceiver which is based on edge emitting lasers, but China manufacturers started very slowly in this regard.


40G QSFP+ Module


•Domestic manufacturers have begun to shift data communications market.

As mentioned before, in several early years, to most of the domestic manufacturers, data communications market still belongs to a "blank" area, but we saw in 2013 China light Fair (cioe2013) scene, many companies have shifted products focus to the field of data communication, intending to open up a new “blue ocean”.

•40G is still the mainstream.

In the field of data communication, there exist many technical arguments, such as silicon photonic technology VS array light engine core technology, Ethernet VS Fibre Channel, CFP/CFP2/CFP4 argument, evolution of 10G/40G/100G, single multi-mode argument, among them 40G and 100G dispute  is the most argued one.

Lightcounting CEO Vladimir Kozlov also expressed similar views, he pointed out that currently in trunk and branches architecture, most of the connection is 10Gig. "With real (Native) 40GbE rising in more large data centers, this situation will begin to change. In Super-spine that transport data from convergence layer to data center core switch, 100GbE can be use, and I’m sure that enterprise like Google is using100GbE already at present. But its number may be three orders lower than trunk and branches. Today market demand of 100GbE is not high, this is certainly also related with the high prices of relevant module.

The greater the amount, the lower the price, but the complexity and size of module (100G CFP) also needs to reduce. In the case of 10Gig, the main (cost reduction) milepost is transition to 10Gig port. For 100Gig, transition to 4*25G port will be inevitable, but it will be a big change. "Again, don't think it a thing of two or three years, it’s more likely to need five to ten years.

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