Heavy Reading: Photonic integration to drive NG optical development

March 19, 2008

MARCH 19, 2008 -- The long-awaited emergence of PIC technology will lead to a massive change in the way optical networks are built and deployed over the next decade, resulting in significant cost/performance benefits for network operators and their customers, according to Heavy Reading.

MARCH 19, 2008 -- The long-awaited emergence of photonic integrated circuit (PIC) technology will lead to a massive change in the way optical networks are built and deployed over the next decade, resulting in significant cost/performance benefits for network operators and their customers, according to a new report from Heavy Reading.

"A major change is needed in the optical technology supply chain, as market forces continue to push for higher bandwidth at lower prices," notes Sterling Perrin, Senior Analyst with Heavy Reading and author of the report, Photonic Integration & the Future of Optical Networking. "For the industry to achieve the future it envisions, a new revolution in optical communications will be needed. Photonic integration -- with the PIC at the center of it -- may be the biggest contributor to this revolution over the next 10 years and beyond."

Conventional electronic IC technology can no longer deliver the cost/performance ratios required in 21st-century telecom networks, Perrin says. "Large network operators, including AT&T and Verizon, are clamoring for more channel capacity and looking for a migration to 100-Gbit/sec transport networks over the next several years," he explains. "Photonic integration can go a long way toward bringing costs down so that suppliers can meet operator pricing requirements while also selling systems at a profit."

Other key findings of Photonic Integration & the Future of Optical Networking include:

There is a significant investment gap in the photonic integration sector today, creating the potential for a technology shortfall over the next several years. There has been a lack of investment in photonic integration over the last five years, leaving major gaps in innovation. The telecom market contraction that hit North American and Europe in 2001 continues to affect the PIC sector, as components vendors were hit harder than both their customers (equipment suppliers) and their customers' customers (telecom operators).
The biggest barrier to more rapid development of PIC technology is the upfront funding required for dedicated manufacturing facilities. As long as in-house manufacturing remains critical to the PIC sector, the barriers to entry will remain very high -- and likely insurmountable -- for venture-funded startups. And as long as PICs require exotic materials to produce, such as indium phosphide (InP) today, it is likely that the in-house manufacturing facilities will indeed remain critical to PICs.
In photonic integration, performance, size, and power consumption are all tightly interwoven. Building commercially viable PICs is a delicate balancing act. It is an accomplishment in photonic integration to integrate multiple functions and reduce packaging size by an order of magnitude, for example, while matching the performance of a subsystem built with discrete components. However, power consumption must also be reduced by an order of magnitude to meet subsystem and system-level power specifications.
Silicon photonics will be the hottest trend in optical components for 2008. Silicon photonics has been a fascinating area of science and research for many years, but Heavy Reading believes that 2008 will see the first commercial shipments of silicon photonics-based modules and transponders, which is a huge step forward for the industry.

Photonic Integration & the Future of Optical Networking costs $3,995 and is published in PDF format. The price includes an enterprise license covering all of the employees at the purchaser's company.

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