LightCounting: New Architecture in the 2018 Optical Communications Market

2019-04-03

Market research firm LightCounting recently released its 10th edition of the AOC/EOM (Active Optical Cable/Embedded Module) research report, predicting that this product will usher in higher sales growth in the future. Based on AOC sales, shipments are expected to increase by 33% from the previous forecast in 2021, but sales have only slightly increased due to the price decline during the same period. One of the main reasons for the increase in sales volume is that some major data center suppliers, especially Chinese manufacturers, are aware of the advantages of single-channel AOC connecting servers to primary switches and are beginning to increase deployment. At the same time, the HPC market for high-performance computing will see new growth after this year's weakness.

On the other hand, although the EOM market is not clear, the forecast is still growing. Over the past 20 years, EOM has been used for high-speed internal interconnection of supercomputers, telecommunications equipment and large core routers. The market size is subject to large procurement projects and is unstable. With the emergence of new market opportunities, EOM products are forecast to decline by 6% in sales volume in 2021, but will increase by 11% in sales, especially in 2019.

   LightCounting believes that as deep learning becomes a hot spot, deep neural networks play a more important role in areas such as image recognition, and video search requires better classification techniques. Deep learning puts higher demands on high-speed interconnects, not just cost, but more about technology and performance. To this end, the traditional stacked ridge-like server architecture needs to be replaced with a completely new structure. Representative is the new storage center's switching architecture Gen-Z. Under this architecture, each processor shares DRAM and MRAM, adding an additional storage pool in addition to the processor's local storage. Today, Gen-Z's working speed is 25G, and will increase to 56G and 112G in the future. It is this new computing architecture that has created new market opportunities for AOC/EOM.

The new data architecture brings new demands to the optical communications market. In the webinar, LightCounting founder Vladimir Kozlov used Microsoft's Quincy data center in Washington State as an example. Microsoft used 1Tbps high-speed connections in six local data centers. The growth of distributed data centers and edge data centers is driving the growth of high-speed interconnect applications.

   Vladimir predicted in his speech that it is expected to grow to $8 billion in 2018, but as Chinese equipment manufacturers are constrained by US high technology, they will work more closely with domestic device manufacturers, which will bring new opportunities to China's optical device industry. . LightCounting predicts that the new $1 billion market in 2018 is expected to fall more on Chinese companies, as Chinese equipment manufacturers are unlikely to increase their purchases of North American companies.