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Follow on Google News | "Optical system and module vendors rush to grab 100G IC expertise" PublishedNew Fixed Networks research report from Ovum is now available from Fast Market Research
These functions include ultra-high-speed analog-to-digital conversion (ADC), digital signal processing (DSP) to subtract impairments caused by passing through physical media, and forward error correction (FEC). We believe this tsunami is heading for the optical transponder market. Either it will bring additional value to the merchant transponder, or it will erode the basis for it. A sizeable chunk of electronics is now deeply intertwined with the optics for transport. This is not completely unheard of: we note that direct-detection receivers even at low speeds use PIN-TIA components rather than stand-alone PIN photodiodes for similar reasons. In that case the signal is not really usable without the first-stage electronics that boost the signal level to point where it can be sent to another device. In the 100G coherent case, the received signal is also not turned into real "bits" until its has gone through a clean-up process in the chip. Thus, one could argue that the ADC/DSP and even FEC should be considered as closely linked to the receive optics even though these functions require a much bigger piece of semiconductor real estate. We believe optics vendors should embrace the ADC/DSP/FEC function as integral to the optics. The challenge is that developing these components demands a complex skill set and requires investment. But more seriously, this path faces two opposing forces: one on the demand side and the other on the supply side. Carriers are giving a schizophrenic message to their supply chain. On the one hand, they like optical modules based on multi-source agreements (MSAs) because interchangeable suppliers befit a competitive merchant model. On the other, they continue to choose OEM solutions based on differentiated optical performance. The transmission challenges at 100G and beyond are increasing carriers' interest in differentiated performance. Those OEMs that are able to invest are creating their own 100G DSP chips, reducing market demand for merchant chips and modules. On the supply side, the chip function and implementation technology fall under the traditional purview of framer IC vendors. They can supply to module makers as well as to OEMs. But if the module makers don't control this part of the BOM and R&D roadmap, they will cease to be optical vendors and instead become contract manufacturers or original design manufacturers (ODMs). Already-low margins could be eroded further. Clearly the module makers will have to evolve to survive. The question is which direction they will take. For more information or to purchase this report, go to: - http://www.fastmr.com/ Report Table of Contents: Executive summary In a nutshell Ovum view Recommendations for players Changing landscape for critical technology supply Multiple semiconductor segments vie for optical module chip market Will the DSP come from OEM, module, or IC vendors? Multiple skill sets required Bigger system OEMs control time-to-market with in-house IC OEM was first off the block OEMs more likely to do IC than OC OEMs have higher-layer issues that demand resources Optical module vendors have the most incentive to control the DSP Module vendors have relied on optical expertise to date Performance of optical module less reliant on optics specifications DSP replaces dispersion compensation optics DSP in conjunction with modulation schemes lowers speed and other requirements on active components Future wavelength management specifications more demanding Optical module vendors defending their value; but detailed design interaction between optical channel and IC favors OEMs Density challenge now creates market timing issue for module vendors Merchant IP vendors hold the keys Coherent alone is smaller market than ASSP IC suppliers like Captive supply at two levels of value chain reduces long-term ASSP opportunity Broader trend to replace analog with digital Company briefs AppliedMicro: 100G products Related products Company background Avalon Microelectronics: 100G products Related products Company background Cortina: PHY FEC IC vendor 100G products Mobius: ADC specialist 100G products Company background Multiphy: optical DSP start-up 100G products Company background Opnext: optical module vendor 100G products Related products Company background Fujitsu Microelectronics Europe: mixed-signal IC vendor 100G products Related products Company background Viasat: FEC and DSP IP vendor 100G products Company background Vitesse: PHY FEC IC vendor 100G products Related products Company background List of Figures Figure 1: Forward error correction and digital signal processing block diagram for 100G transport About Ovum Ovum fully understands convergence across telecoms, IT services and software. They invest heavily in researching what is happening in a market that is dynamic and full of risk and reward, analysing the changes and identify the threats and opportunities ahead for their clients. Ovum's team has extensive experience in the sector and is dedicated to 'getting closer' - to the industries they advise on, to the people they work for, and ultimately to the real issues determining how ICT markets behave. Ovum maintains a fluid, highly collaborative structure that brings the right range of expertise to each situation. View more research from Ovum at http://www.fastmr.com/ About Fast Market Research Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156. # # # Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available. End
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