1Q18 Optical Hardware Tracker

The Cignal AI 1st quarter 2018 (1Q18) Optical Hardware market share tracker is active. This tracker allows clients to download a real-time view of industry results as companies report results. Updates are made continuously and are reflected in the tracking table below.
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Ciena – Why the Secret Behind Strong Early Adoption of 400G Technology is … 200G

Ciena references data from the most recent 4Q18 Optical Application report in a blog post that outlines its opinions on how 400G is being deployed.

This month Cignal Ai updated its growth forecast for the coherent 400G DWDM market and provided the interesting graph below which shows how 400G will start to replace 100G and 200G deployments moving forward. The positive outlook represented in the graph is based on expected strong performance of 400G+ equipment across all distances and the expectation that the use of 400G ZR will expand to applications beyond data center interconnect (DCI).

The report also states that significant 400G growth will not begin until 2019, as Ciena is the only production supplier of this technology in 2018.

Acacia 1Q18 Conference Call

Acacia mentioned data from our Optical Applications report during its calendar first quarter conference call with investors on May 3, 2018. The company referenced our extensive work following the development of the coherent 400G ZR market.

We also believe that we will be well positioned in 2019 and beyond to further diversify our revenue base with our 400ZR module which is targeted at the edge DCI market. Analyst projections for this high growth segment show annual demand for 400ZR modules of more than 100,000 units by 2022. We believe these DCI opportunities support our prioritization of this market as a key strategic initiative.

The metro market is still in the early phase of 100G and 200G buildouts. Industry analyst Cignal AI forecasts a compound annual growth rate of 42% for metro network 100G port equivalents from 2017 to 2022.

Full transcript is available at Seeking Alpha.

4Q17 Optical Customer Markets Report

The 4Q17 edition of the Optical Customer Markets report has been released. It provides insight into how much optical equipment different network operators purchase:

  • Covers 4 global regions and five end customer types with quarterly granularity
  • Tracks shipments to Incumbent, Wholesale, Cloud & Colo, Cable MSO & Broadband, Enterprise & Government customers
  • Forecasts by region and customer type
  • Includes detailed vendor market share for equipment sales to Cloud and Colo customers
  • Follows strict methodology to reduce analyst subjectivity

Notable updates include:

  • Updated results by customer market for all of 2017
  • Vendor market share of equipment sales to Cloud and Colo customers for all four quarters of 2017
  • Updated PowerPoint report summary
  • Report updates are now quarterly

Subscribers can download the latest Excel and PowerPoint files.

Report Details Excel PowerPoint

Impact of US Technology Ban on ZTE

On April 16, the United States Department of Commerce announced that ZTE would no longer be allowed to import American technology products. This order represents a reinstatement of a previous order first issued in March 2016 and creates many issues for ZTE, its customers, and suppliers.

While there is no shortage of media coverage of the ban, Cignal AI aims to provide you with unique insight. We have assembled our observations and conclusions on this remarkable event, and we share answers to some common questions we’ve received as it has transpired.

Requires Optical Active Insight subscription.

Cignal AI Increases 400G Forecast, Citing Flexibility of Technology and Expanding Applications

Compact Modular Optical Hardware Outpaces Projections as Adoption Extends Outside Cloud and Colo Customers

BOSTON (April 17, 2018) –Networking component and equipment market research firm Cignal AI has updated its growth forecast for the coherent 400G WDM market. The optimistic outlook is supported by expanding applications for pluggable 400G ZR, as well as the improved performance of 400G+ equipment across all distances.

These conclusions are captured in Cignal AI’s most recent Optical Applications Report, which includes full 2017 port shipment results and market share for all equipment vendors. The report also offers insight into projected growth in the compact modular hardware segment, which enables disaggregated hardware optical network deployment models.

“Coherent 400G will cap the growth of existing 200G and 100G technologies by 2020 as new equipment becomes available that maximizes optical capacity independent of reach,” said Andrew Schmitt, lead analyst for Cignal AI. “Compact modular equipment is the enabling platform, with revenue almost quadrupling in 2017, and we expect that it will continue to grow at least 40 percent per year through 2022.”

The Optical Applications Report is issued quarterly, and the most recent report updates market share for 2017 and provides forecasts in three key markets: 100G+ coherent WDM, compact modular equipment, and advanced packet-OTN switching hardware.

Key report findings include:

100G+ Coherent WDM

  • Shipments of 100G+ coherent ports grew rapidly in Western markets, increasing more than 50 percent for 2017 and outpacing growth in China for the first time.
  • Despite the increased port shipments, a challenging pricing environment kept revenue growth flat.
  • Coherent 200G now accounts for more than 10 percent of the market, with shipments led by Ciena and Nokia.
  • 2018 will usher in more market stability with less disruption by new companies and technology. A better pricing environment and improved financial results are expected as a result.
  • Significant 400G growth will not begin until 2019, as Ciena is the only production supplier of this technology in 2018.

Compact Modular Equipment

  • 2017 revenue for this segment quadrupled as cloud and colo vendors migrated their hardware architectures to the new form factor.
  • Ciena and Cisco were the beneficiaries of this growth because of their state-of-the-art systems. These two vendors along with Infinera accounted for most shipments during 2017.
  • Hardware disaggregation is driving interest in this category, as operators begin to embrace this model to gain greater supply chain flexibility. Cable MSOs, wholesalers and incumbents such as AT&T are showing interest in compact modular equipment to build disaggregated networks.
  • The compact modular market continues to climb an upward trajectory, with products increasingly adopted by a wide range of operators. Cignal AI expects the market to expand rapidly as carriers outside of the cloud vertical utilize this equipment, creating multiple market entry points for a variety of vendors.

Advanced Packet-OTN Switching

  • Large incumbent operators continue deployments of these systems. Despite the complexity, advanced packet-OTN switching remains the best approach for unifying multiple legacy networks and applications onto a single transport infrastructure.
  • This market grew 35 percent in 2017 with strong shipments in China and EMEA, which primarily benefited Huawei and Nokia.

About the Optical Applications Report

The report includes market share and forecasts for revenue and port shipments for optical equipment designed to meet the needs of specific applications: 100G+ coherent, compact modular and advanced packet-OTN switching hardware. Deliverables include an Excel file with complete data set, PowerPoint summary and Optical Equipment Active Insight.

The report features revenue-based market size and share the hardware categories, and detailed port-based market size and vendor market share for 100G+ shipments. Vendors examined include: Acacia, Adtran, ADVA, Ciena, Cisco, Coriant, Cyan, ECI, Ekinops, Fiberhome, Fujitsu, Huawei, Inphi, Infinera, Juniper Networks, NEC, Nokia, NTT Electronics (NEL), Padtec, TE Conn, Transmode, Xtera and ZTE.

Full report details, as well as articles and presentations, are available to users who register for a free account on the Cignal AI website.

About Cignal AI

Cignal AI provides active and insightful market research for the networking component and equipment market and the market’s end customers. Our work blends expertise from a variety of disciplines to create a uniquely informed perspective on the evolution of networking communications.

Contact Us/Purchase Report
Sales: [email protected]
Web: Contact us
Link to Release

4Q17 Optical Applications Report

The 4Q17 edition of the Optical Hardware Applications report has been released. The report contains details on the following areas:

  • Compact Modular hardware market share and forecasts
  • 100G+ coherent port shipments & vendor market share
  • 100G, 200G, and 400G+ coherent, 400G ZR and direct detect port shipments and forecast
  • Advanced Packet-OTN Switching market share and forecasts

This release has significant updates and enhancements:

  • Updates to the 400G port shipment methodology, simplifying the categorization of ports. Physical port shipments are no longer defined by reach. All 100G, 200G, and 400G+ coherent port shipments are counted, as well as direct detect and 400G ZR for edge applications.
  • Added 3Q and 4Q17 market share results for Compact Modular and Advanced Packet-OTN Switching equipment hardware.
  • Updated coherent port shipment market share to include Inphi ColorZ historical numbers. Despite not being a coherent solution, it does displace the use of coherent 100G and its impact should be measured.
  • The Compact Modular hardware forecast was increased again. This market continues to grow at rates that outstrip the most optimistic projections.
  • Report updates are now quarterly.

Current subscribers can download Excel and PowerPoint files.

Report Details Excel PowerPoint

OFC 2018 – Operator Perspectives

Each year at OFC, we have the valuable opportunity to hear from the network operators themselves to better understand their vision for the future network. This year, there were some excellent presentations and discussions involving operators from several network verticals – Incumbents, Cable MSOs, and of course the ever-expanding cloud and colocation operators.
Requires Optical Active Insight subscription.

OFC 2018 – 400G Inside the Datacenter

When the conversation at OFC turned to short reach client optics, faster speeds were the central focus.  Several companies announced products and gave demonstrations of 400G capable technology. The 100G speeds and production ramp that had been such a hot topic at OFC 2017 had little follow-on during 2018.
Requires Optical Active Insight subscription.

OFC 2018 – Coherent Technology

Trends in coherent technology generated enthusiasm among the participants at OFC 2018, and 400G ZR applications were of particular interest. Nokia and Infinera outlined next-generation coherent roadmaps, and Acacia and NTT Electronics showcased silicon fresh back from the fab. Many component companies announced smaller, lower cost devices to enable new WDM applications. In this report, Cignal AI examines OFC 2018’s coherent technology announcements and their implications.
Requires Optical Active Insight subscription.

OFC 2018 – Compact Modular Equipment

Compact Modular Equipment took center stage at OFC 2018. News included speed upgrades to existing systems, the emergence of new switch/router variants, and open line systems designed to address the growing interest in optical hardware disaggregation.
Requires Optical Active Insight subscription.

OFC 2018 – Consolidation

Each year, there is at least one announcement at OFC which surprises the industry. In 2016, the announcement was the introduction of Inphi’s ColorZ, while in 2017 it was news of Ciena choosing to license the Wavelogic DSP to module vendors. And yet, OFC2018 delivered a surprise that exceeded both: Lumentum will acquire Oclaro.
Requires Optical Active Insight subscription.

Nokia PSE-3 Coherent Chipset

On March 6, 2018, Nokia announced its fourth generation coherent optical technology, the PSE-3, which continues the company’s strategy of developing coherent DSP processors in-house. Nokia is betting that these chips will differentiate the performance, price, and availability of its optical hardware products.

This Cignal AI report explores what makes the new PSE-3s different from off-the-shelf solutions and examines the question of whether or not vertical integration still makes sense in this market.

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Requires Optical Active Insight subscription.

Fujitsu Accelerates Path to 5G with Next-Generation Variable Optical Transport

Fujitsu announced its new 1FINITY T500 and T600 products, adding to its family of compact modular transponders and optical common equipment. The T600 is capable of 600G per wavelength coherent operation using the NTT Electronics DSP.

“As users continue to push more demanding application traffic over the network, service providers require high-performance, high-speed transport to enable greater bandwidth capacity,” said Andrew Schmitt, lead analyst at Cignal AI. “The latest 1FINITY transport technology enables faster transport speeds, design flexibility and power efficiency to meet the needs of escalating mobile, broadband and cloud network traffic.”

Inphi Announces World’s First 400Gbps PAM4 Platform Solutions

Inphi announced its 16nm 400Gbps 56GBaud Porrima Single-Lambda PAM4 chip platform. This silicon is required to hit cost points for QSFP56-DD modules that will enable high volume adoption of 400GbE inside data centers.

“The latest generation of 12.8Tb/s Ethernet switch silicon will support 32 ports of 400GbE and is expected to ship in late 2018. These advanced switches require 400GbE DR4/FR4 optical modules built from reliable, low power PAM4 silicon. The arrival of Inphi’s 400G PAM4 platform solution will boost the 400GbE market and allow optical components vendors and their customers to successfully transition to 400G speeds,” said Andrew Schmitt, lead analyst at Cignal AI.

Nistica launches wavelength management products for data center and 5G mobility applications

This was an announcement for Nistica’s new WSS module, code-named Bernoulli, which is designed for use in compact modular optical open line systems. It fits in the size of a CFP2 module and comes in different versions to perform critical monitoring, power balancing, or optical switching functions.

Andrew Schmitt, Lead Analyst at Cignal AI, elaborated further. “The demands of 5G wireless services require high capacity wavelengths at the edge of the network and will require operators to refresh existing front-haul infrastructure. Network operators will use this opportunity to install systems and platforms that allow them to manage and monitor these wavelengths. Nistica’s Bernoulli platform is uniquely suited to address the challenging power management and protection requirements in these applications.”

Microsemi Enables Terabit OTN Switching Cards for Flexible Optical Networks

Microsemi (Acquired PMC-Sierra) announced announced a 1.2 Terabit capacity OTN framer/processor chip, no doubt designed to pair with the flood of 1.2T DSPs hitting the market during 2018. The device can support 400GbE clients as well as Flex-E and has onboard encryption.

“While 100G is prevalent in both metro and long-haul networks today, next-generation packet optical transport must scale beyond 100G and include features that eliminate excess margin and quickly deliver bandwidth when and where it is needed,” said Andrew Schmitt, lead analyst with Cignal AI. “With the DIGI-G5, Microsemi continues a long history of delivering market-leading OTN chipsets that are at the foundation of OTN transport and switching networks.”

Nokia pushes optical network capacity to theoretical limits with Photonic Service Engine 3 chipset

Nokia announced it’s third generation coherent in-house DSP family. AMopng support for higher modulations and baud rates supporting up to 2x600G transmission, it added probabilistic constellation shaping (PCS) which maximized channel capacity.

“With the arrival of the new PSE-3, Nokia is making a significant leap forward in the performance of high-end coherent DSPs. PCS enables network operators to extract maximum spectral efficiency out of their networks. This technology also enhances all distances and applications, which makes it ideal to address the requirements of not only cloud and colocation operators but also traditional incumbent and cable MSO providers.”

4Q17 Optical Hardware Forecast

On February 14th, Cignal AI issued full optical equipment market share analysis for 4th quarter 2017 (4Q17). This second report extends our analysis and summarizes forecasts and outlooks for the industry through 2022.

Subscribers to the Optical Hardware Report are able to download an excel file with actual results through 4Q17 along with detailed, up-to-date forecasts. A complete compilation of our 4Q17 market share and forecast analysis is available in both web format as well as .pdf format.

 

We extended our forecasts for revenue and ports to 2022, and made minor adjustments to our worldwide 2019 and longer-term forecasts; a detailed discussion follows.

Requires Optical Hardware subscription.

Investor Call – Piper Jaffray Optical Event

Andrew Schmitt was the featured speaker on an investor call hosted by Troy Jensen of Piper Jaffray on February 21st. Forty-four participants listened in and posed their questions as Andrew gave his perspective on the latest events in the optical component and equipment market.

Topics during the call included:

  • Anticipated impact of China’s MIIT plan on existing component suppliers
  • The divergence in Chinese equipment revenue and supply chain
  • The market outlook for ROADMs in 2018
  • The 400G+ Coherent DSP and component outlook
  • The evolution of the CFP2-ACO and DCO market
  • Analysis of equipment companies outsourcing DSPs
  • Update on Inphi’s ColorZ, modulator driver, and PAM-4 business
  • Infinera’s market opportunity with the CX2 and ICE4 based products
  • North American CapEx in 2018 and optical equipment forecast
  • Ciena’s 400G market monopoly in 2018

Active Insight clients can access a summary of the key takeaways, a written transcript, an audio replay, and participate in Q&A.

Requires Optical Active Insight subscription.