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Gradually improved: China’s optical device market

Date: 2020-08-07 14:26 From: C-light Onclick:
Industry technological breakthroughs have led to an increase in gross profit margin. With the merger and acquisition of the global optical communication industry, the ranking of the world's top ten optical device manufacturers changed in 2019. Chinese optical device manufacturers accounted for 4 of the world's top ten optical device manufacturers, and their market share increased from 18.05% in 2018 to 2019 21.78%. At the same time, due to the impact of new technology breakthroughs on the product structure reorganization of many optical device companies, the gross profit margin of global optical device companies has increased and tended to be similar, generally maintaining between 25%-30%.
 
Optical modules are mainly used in telecommunications and data markets. In the telecommunications market, the main customers of optical module manufacturers are communication equipment manufacturers, and the end users are operators. Datacom market: Downstream users are mainly data centers of Internet service providers, such as BAT, Google, Amazon, etc. In recent years, the data communication market has gradually become the main subdivision area driving the growth of global optical modules. The capital expenditures of cloud computing vendors represented by Google, Amazon, etc. continue to increase, driving the continuous increase in the number and flow of cloud data center construction. The data communication market has become increasingly important in the overall market in recent years.
 
In order to largely improve the efficiency of datacom market by saving the cost, C-light, an experienced innovator of optical transceiver modules, has solved many technical obstacles in this industry. One of an outstanding achievement is the development of the WDM BD transceiver. Compared with other products in this category, C-light’s WDM BD transceiver are with far more choices of wavelength range, in terms of spacing as dense as 20nm of wavelength coupled for the transmitter and the receiver. This technology meets the demand of customers who keep seeking wavelength customized in particular application scenario. The breakthrough is leading in current development level of WDM and Bidi research, and is expected to bring the revolution of technique for users of switches, servers and routers. This milestone is one of reasonable outcome of C-light’s long-term endeavor for wavelength division multiplexing and bi-directional applying.
 
To demonstrate main function and other features of the customized wavelength transceivers, C-light’s marketing and design team make an short 3D animation video:
 
 
   
1, Europe, America, Japan and other countries accelerate industry integration
 
Countries in Europe, America, and Japan are constantly integrating to seize the next-generation optical communication market. Due to the transparency of low-end product prices, many overseas companies are unable to accept the excessively low gross profit margin and thus strip off the optical module business to focus on chips or retain high-end products. Since 2018, leading optical communication companies in the United States have gradually entered the integration stage, and the number of manufacturers has decreased. At the same time, major equipment vendors such as Cisco have successively acquired Luxtera, Acacia and other silicon optical leading companies to lay out the next-generation optical communication technology and market. Lumentum acquires Oclaro, II-VI acquires Finisar, and the industry giants continue to integrate and promote the transformation of the industrial structure.
 
Overseas optical module manufacturers basically have the capability of self-developing optical chips. Optical modules are mainly used in the telecommunications market and the data communication market, so their models are scattered and there are many types. Therefore, in order to enrich the product types and quickly meet the various requirements of customers on product models and specifications, and at the same time affected by the low willingness of enterprises in the optical chip market, various optical module manufacturers have deployed upstream and began to develop their own chips. Overseas optical module manufacturers basically have their own optical chip production lines, and the whole industry layout is carried out. The products can iterate quickly and seize the market.
 
The core idea is to "replace electricity with light", integrate optical devices and electronic components into a separate microchip, use laser as an information transmission medium, improve the connection speed between chips, with low power consumption, high speed, compact structure, etc. Outstanding advantages are considered as key technologies that will solve the bottlenecks in power consumption, speed, and volume faced by information networks. Based on these advantages, in addition to a batch of traditional optical chip and optical device manufacturers all arranging in advance, some main system equipment manufacturers have also joined the silicon optical battlefield. However, the current silicon photonics technology is not yet mature, and it is still some time before large-scale application. Intel has achieved a leading position in the silicon optical industry. 
 
2. Domestic enterprises self-control is of great significance
 
In recent years, China's optical communication device market has maintained the same growth trend as the global market. China's optical communication device market accounts for approximately 25%-30% of the global market share. China has the world's largest optical communications market and high-quality system equipment vendors. From the perspective of chip manufacturing, the localization rate of 10Gb/s optical chips is close to 50%. Domestic suppliers can provide a small amount of 25Gb/s In addition to PIN devices/APD devices. The 25Gb/s DFB laser chip has been developed. 100G and CWDM modules are still eye-catching products in optical communication. In this regard C-light make many significant performance in equipment developing, following a wide series of test to assure the quality.
 
C-LIGHT’s records of Module testing on switch
 
Model number of Testing Switch:CISCO N9K-C92160   
 
Modules Part numberQSFP-100G-CWDM4 10km
 
Identification information of Module on the switch:
switch# show interface ethernet 1/52 transceiver details
Ethernet1/52
    transceiver is present
    type is QSFP-100G-CWDM4
    name is FABRINET
    part number is EA100WDM10A24-M
    revision is 24
    serial number is EA10M1836FH00039
    nominal bitrate is 25500 MBit/sec
    Link length supported for 9/125um fiber is 10 km
    cisco id is 17
    cisco extended id number is 204
  Temperature   37.93 C        65.00 C     -5.00 C     60.00 C        0.00 C
  Voltage        3.26 V         3.54 V      3.00 V      3.46 V        3.13 V
  Current       55.40 mA      100.00 mA    20.00 mA    95.00 mA      25.00 mA
  Tx Power       0.14 dBm       4.49 dBm   -8.50 dBm    2.49 dBm     -6.51dBm
  Rx Power      -0.28 dBm       4.49 dBm  -17.69 dBm    3.49 dBm    -14.55dBm
4.
Interfaces link information:
switch# show interface ethernet 1/52
Ethernet1/52 is up
admin state is up, Dedicated Interface
  Hardware: 1000/10000/25000/40000/50000/100000 Ethernet, address: a8b4.56e4.78c
7 (bia a8b4.56e4.78fe)
  MTU 1500 bytes, BW 100000000 Kbit, DLY 10 usec
  reliability 255/255, txload 1/255, rxload 1/255
  Encapsulation ARPA, medium is broadcast
  full-duplex, 100 Gb/s, media type is 100G
  Beacon is turned off
  Auto-Negotiation is turned on  FEC mode is Auto
  Input flow-control is off, output flow-control is off
 
 
It will take some time for the chip industry to surpass overseas. Among them, the domestic Foundry capacity of optical chips is seriously insufficient to restrict the progress of tape production. The optical chip industry chain includes multiple steps such as chip design, substrate manufacturing, pump crystal growth, and die manufacturing, and the process flow is relatively complex. The birth of an optical chip requires multiple links such as design, tape-out, finalization, and mass production. The complete process is between one and a half to two years. Due to the serious shortage of China's Foundry production capacity or backward technology, a large number of chip companies in China have taped out. Progress is severely constrained abroad. In addition, the electronic chip industry chain includes IC design, wafer manufacturing and processing, packaging and testing. It also has complex processes and processes, and needs to improve the entire semiconductor industry chain short board. Domestic substitution still has a long way to go.
 
In recent years, domestic manufacturers' investment in R&D has gradually increased. The proportion of R&D at home and abroad has increased, and major manufacturers have taken technological upgrading as an important direction of the resistance cycle. In recent years, domestic manufacturers' investment has shown an increasing trend, and the gap has gradually narrowed.
 
3, 5G speed-up drives the generational upgrade of optical modules
 
5G network construction has triggered the demand for optical module replacement. The 5G network is mainly composed of three main parts, namely wireless network, bearer network and core network. The three major operators have increased their capital expenditures for 5G construction in 2020. The construction of 5G networks will enter a period of rapid development from 2020, in which wireless and bearer networks will usher in intergenerational upgrades in technology, and optical modules will also usher in Replacement requirements.
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