active optical cables - optical communications market ... report 2012 abstract toc.pdf · active...

LIGHTCOUNTING Market Research on High-Speed Interconnects Datacom, Telecom, CATV, FTTX, Consumer markets

Active Optical Cables

Supercomputers-to-Smartphones

And Everything in Between, Both Inside & Out

4th Edition – March 2012

Telecom/Datacom and Video/Consumer/Embedded Markets

InfiniBand, Ethernet, Fibre Channel, SAS, PCI Express

HDMI, DisplayPort, Thunderbolt, eDp and MIPI

What you need to know about AOCs – the hype versus the reality

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Active Optical Cables – March 2012 Supercomputers to Smartphones!


LightCounting.com Brad Smith [email protected]

Published by LightCounting LLC. Copyright © February 2012 All Rights Reserved. Do Not Copy

Abstract

This report examines the rapidly emerging product segment that embeds optical transceiver technologies

into enclosed cables that hide the high-speed optics behind two transceiver ends with an electrical

interconnect presented to the outside. This factor enables creating very high speed and high aggregate

data rate links at costs significantly below that of two separate connectorized transceivers and fibers.

This report presents data on annual AOC shipments, revenues, average selling prices for 2007-2011 and

forecasts the market for 2012-2016. It analyses technologies, market trends, protocol transitions, data

rates, MSAs for InfiniBand and Ethernet protocols as well as potential applications of AOCs in disk and

SSD storage, GPU clusters, and board-level interconnects using SAS and PCI Express AOCs. Lastly,

future Wave Division Multiplexing AOCs are examined from silicon photonics companies for 2013 that

promise 100G in a QSFP format and scalable in the future to 1.6T per AOC with enough aggregate

bandwidth to uplink and entire server rack or router with a single link.

Additional analysis and forecast is included for the emerging Video and Consumer AOC segment using

HDMI, DisplayPort and USB. Lastly, analysis of the embedded AOC segment with embedded DisplayPort

and MIPI protocols with a first attempt at a forecast.

The report is based on confidential sales information and detailed analysis of publicly available data

released by leading component and equipment manufacturers.

By Brad Smith LightCounting LLC. Sr. Vice President, Industry Analyst 858 West Park Street, Eugene, OR 97401 [email protected] www.LightCounting.com (408) 813-4345 408.962.4851

LightCounting, LLC. is a 7 year old leading optical and copper communications market research

company, offering semi-annual market update, forecast and state of the industry reports based on

analysis of publicly available information and confidential data provided by more 20 leading module and

component vendors. LightCounting is the optical communications market’s source for accurate, detailed

and relevant information necessary for doing business in today’s highly competitive market environment.

Privately held, LightCounting is headquartered in Eugene, Oregon. For more information, go to:

http://www.LightCounting.com or follow us on Twitter at: http://www.twitter.com/lightcounting

mailto:[email protected]

http://www.lightcounting.com/

http://www.lightcounting.com/

http://www.twitter.com/lightcounting

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Author Biography

Brad has over 30 years industry experience in both optical and semiconductor industries in marketing and

business development and an extensive background in market research. He cofounded three

semiconductor companies and one optical communication company with successful M&A exits. Most

notable was Nexgen Microsystems which was sold to AMD and is now their microprocessor line and

LuxSonar Semiconductors sold to Cirrus Logic for $65M

Industry Experience:

NOS – VP Sales, Marketing and Business Development; optical communication technologies in

optical switching, sensing and spectroscopy

Innovision Labs - President/COO, HDTV video semiconductors

Luxsonor Semiconductors - President/COO, DVD semiconductors; sold to Cirrus Logic for $65M

Nexgen Semiconductors - co-founder and Director of Product Marketing

Market Research Experience:

LightCounting Sr. VP Optical Communications and Components

RHK as VP of Optical Components & Communications Semiconductor group

Gartner Group as VP of Technology

Dataquest as VP of Computers and Peripherals group

In Venture Capital and Mergers & Acquisitions:

Brad raised over $100M in venture capital

Participated in 10+ M&As

Venture partner at Propel Partners

Brad holds two patents in Raman optical spectrometry, sensing and optical switching

At LightCounting, Brad researches Datacom and Telecom markets, 10/40/100G, parallel optics, board-

level optics, AOCs, Embedded Optical Modules, HPCs, communication semis and silicon photonics as

well as manages custom consulting.

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Table of Contents

Active Optical Cables................................................................................................................................. - 1 -

Supercomputers-to-Smartphones ............................................................................................................. - 1 -

And Everything in Between, Both Inside & Out ......................................................................................... - 1 -

4th Edition – March 2012 ........................................................................................................................... - 1 -

Abstract ..................................................................................................................................................... - 2 -

Author Biography ...................................................................................................................................... - 3 -

Table of Contents ...................................................................................................................................... - 4 -

Report Objective ..................................................................................................................................... - 12 -

Executive Summary ................................................................................................................................. - 13 -

Chapter 1: Summary of Key Issues and Changes in 2011 & Outlook for 2012-2016 .............................. - 14 -

1.1 2011 Action - Key Industry, Market, Company and Product Changes ........................................ - 14 -

2011 Market Size & Overview ............................................................................................................................ - 14 -

What’s Driving the Market Growth? 5G and 10G are the Tipping Points ......................................................... - 16 -

2011 Product Actions ......................................................................................................................................... - 17 -

2011 Company Actions - AOC Acquisitions Change the AOC and Transceiver Competitive Landscape ............ - 18 -

Prices .......................................................................................................................................................... - 19 -

1.2 2012 & 1H 2013 Outlook and Predictions Summary ................................................................. - 19 -

1.3 2013-2016+ ................................................................................................................................. - 20 -

Chapter 2: AOCs Gain Strong Foothold in the HPC InfiniBand - Other Segments Now Emerging .......... - 22 -

2.1: Introduction ................................................................................................................................ - 22 -

AOC Market Expands .......................................................................................................................................... - 23 -

Buyer Motivations .............................................................................................................................................. - 23 -

AOCs Find a Home for Silicon Photonics ............................................................................................................ - 24 -

AOC Engines Enable Creating New Products: EOMs, Hybrids, Backplane Interconnects .................................. - 24 -

2.2 The AOC Business ........................................................................................................................ - 25 -

InfiniBand & HPC Are the Main Market Today ................................................................................................... - 26 -

Enter Video AOCs ............................................................................................................................................... - 27 -

Enter Consumer optics ....................................................................................................................................... - 27 -

Enter Embedded AOCs ....................................................................................................................................... - 28 -

Mega Data centers and 100Gs 2Km Issue .......................................................................................................... - 28 -

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Chapter 3: AOC Features, Benefits and Technologies ............................................................................ - 29 -

3.1 AOC Advantages From The Buyers Perspective .......................................................................... - 29 -

Power Consumption Becomes a Significant Issue – Operational Expenses ....................................................... - 30 -

3.2 AOC Advantages From The Manufacturer’s Perspective ............................................................ - 31 -

Closing Off Photonics to the Outside World ...................................................................................................... - 31 -

Integration and Manufacturing Innovation Reduce Opto-electronics Costs ..................................................... - 33 -

Figure 3-1: AOC Simplified Transceiver Construction ..................................................................................... - 33 -

Innovation Blooms Due to Relaxed Interoperability Constraints ....................................................................... - 35 -

Introduction of Advanced Technologies: Silicon photonics and WDM AOCs .................................................... - 37 -

Figure 3-2: Luxtera’s Silicon Photonic ACO Technologies ............................................................................... - 38 -

Silicon Photonics Enable Extremely Sensitive Photon Detection ....................................................................... - 38 -

Silicon Photonics-based AOCs Enable Very Fast Modulation ............................................................................. - 38 -

AOCs May Enable Inexpensive, Short Reach WDM ............................................................................................ - 39 -

Chapter 4: AOC Products, MSAs, & Protocols ......................................................................................... - 40 -

4.1 AOC Transceiver MSAs ................................................................................................................ - 40 -

Changes in 2011 and Expected in 2012 .............................................................................................................. - 40 -

MSAs .............................................................................................................................................................. - 40 -

Protocols ........................................................................................................................................................ - 40 -

Competition ................................................................................................................................................... - 41 -

CX-4 .......................................................................................................................................................... - 41 -

QSFP .......................................................................................................................................................... - 41 -

CXP .......................................................................................................................................................... - 42 -

Next Generation MSA Madness – QSFP/2, zQSFP+, zCXP, ZXP, CXP/2, Extended CXP, eCXP, eQSFP, CFP/2, CFP/4.

CFP/4/DD! - 42 -

Figure 4-1: Main MSAs Form Factors for AOCs .............................................................................................. - 43 -

SFP+ .......................................................................................................................................................... - 43 -

Mini SAS HD ........................................................................................................................................................ - 43 -

iPass for PCI Express ........................................................................................................................................... - 43 -

Figure 4-2: Mini-SAS HD and iPass for SAS and PCI Express ........................................................................... - 44 -

4.2 AOC Product Configurations ....................................................................................................... - 44 -

Hybrid AOCs ....................................................................................................................................................... - 44 -

Breakout AOCs ................................................................................................................................................... - 44 -

Half- AOCs - 45 -

Figure 4-3: AOC Product Examples ................................................................................................................. - 46 -

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Figure 4-4: Breakout Hybrids & Half AOCs ..................................................................................................... - 46 -

Data Striping With AOCs .................................................................................................................................... - 47 -

WDM AOCs on the Horizon? .............................................................................................................................. - 47 -

Figure 4-5: WDM 10-16 Channel Laser Source ............................................................................................... - 48 -

4.2 AOCs – Protocol & Road Maps .................................................................................................... - 48 -

InfiniBand AOCs – Dominates Today .................................................................................................................. - 48 -

QDR Rules and SDR, DDR Fades Fast ............................................................................................................. - 49 -

FDR – Fourteen Data Rate – the Next Step in 2012 ....................................................................................... - 49 -

EDR – Enhanced Data Rate - Someday .......................................................................................................... - 49 -

Figure 4-6: InfiniBand Technology Roadmap ................................................................................................. - 50 -

Ethernet AOCs – The Next Big Thing .................................................................................................................. - 50 -

Figure 4-7: Ethernet Technology Roadmap .................................................................................................... - 51 -

Fibre Channel AOCs ............................................................................................................................................ - 52 -

Figure 4-8: Fibre Channel Technology Roadmap ........................................................................................... - 52 -

SAS AOCs – For Big Storage ................................................................................................................................ - 53 -

Figure 4-9: SAS Technology Roadmap ............................................................................................................ - 54 -

Figure 4-10: SAS Array Expanders .................................................................................................................. - 54 -

JBODs, HAMR and SSD-HAMR Hybrids........................................................................................................... - 55 -

Figure 4-11: JBODs Potentially Filled with 30TB Disks ................................................................................... - 55 -

Figure 4-12: HAMR Disk Drive Technology ..................................................................................................... - 56 -

SAS 101 .......................................................................................................................................................... - 56 -

PCI Express AOCs ................................................................................................................................................ - 57 -

Rationale for Using PCI Express ..................................................................................................................... - 58 -

PCI Express 101 .............................................................................................................................................. - 59 -

Companies to Watch in PCI Express Optical ................................................................................................... - 59 -

Figure 4-13: Samtec/AlpenIO PCI Express AOC, EOM and Line Card ............................................................. - 60 -

Figure 4.14: OneStop Systems Disk Array Using PCI Express Optical ............................................................. - 61 -

Telecom, Military, Scientific – “Proprietary Bit-Blitzer’s” .................................................................................. - 61 -

Chapter 5: AOC Competitive Landscape ................................................................................................. - 62 -

Changes in 2011 and Expected in 2012 .............................................................................................................. - 62 -

5.1 The Entire AOC Supplier an Buyer Landscape Restructured in 2010 & 2011 ............................. - 63 -

A) Consolidations in InfiniBand Silicon, Adapters and Switching Systems ............................................ - 63 -

Mellanox Acquired InfiniBand Competitor Voltaire ....................................................................................... - 63 -

Intel Bought Q-logic’s InfiniBand Business Unit ............................................................................................. - 63 -

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B) Consolidation in the Server & Switching Systems Supply Chain ....................................................... - 64 -

C) Big Connector/Cabling Companies Buy Up AOC Startups & Business Units ..................................... - 64 -

AOCs Are Now Supplied By Multi-Billion Dollar Suppliers .............................................................................. - 65 -

D) China Impacts AOC Market in Unexpected Ways – Sets Off Wave of Low-Cost AOC Asian

Manufacturing .................................................................................................................................................... - 66 -

Enter AOC Manufacturing Kits ....................................................................................................................... - 66 -

Figure 5-1: GigaLight Press Release ............................................................................................................... - 66 -

Figure 5-2: Now Offering Clock Radios, LED Light Bulbs, HDMI & USB Cables and ……HPC AOCs! ................ - 67 -

Figure 5-3: Chinese Tianhe-1A HPC & Custom ASIC for Dual AOCs ................................................................ - 69 -

Figure 5-4: Tianhe-1A HPC Custom ASIC for Dual AOCs ................................................................................. - 70 -

5.2 AOC Suppliers .............................................................................................................................. - 72 -

AOC, Transceiver and Cabling Suppliers ............................................................................................................. - 72 -

Avago ............................................................................................................................................................. - 72 -

Emcore ........................................................................................................................................................... - 72 -

Finisar ............................................................................................................................................................. - 72 -

Hitachi Cable .................................................................................................................................................. - 73 -

Molex ............................................................................................................................................................. - 73 -

TE Connectivity ............................................................................................................................................... - 73 -

FCI/MergeOptics ............................................................................................................................................ - 73 -

Samtec/AlpenIO ............................................................................................................................................. - 73 -

GigaLight ........................................................................................................................................................ - 74 -

3M .................................................................................................................................................................. - 74 -

Venture Funded Start-ups .................................................................................................................................. - 74 -

Merge Optics, AlpenIO, Luxtera, and Zarlink, ……They were all acquired! Nobody left! But there are a few

silicon photonics startups readying components and high-speed AOC products. 25G may bring in a few silicon

photonics startups to the game. ........................................................................................................................ - 74 -

AOC Subassembly, Electronics and Other Suppliers .......................................................................................... - 74 -

IPtronics ......................................................................................................................................................... - 74 -

Gennum .......................................................................................................................................................... - 75 -

GigOptix ......................................................................................................................................................... - 75 -

Ensphere ........................................................................................................................................................ - 75 -

Photonera ...................................................................................................................................................... - 75 -

Reflex Photonics ............................................................................................................................................. - 75 -

Innolume ........................................................................................................................................................ - 75 -

Connector Optics ............................................................................................................................................ - 76 -

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VI Systems GmbH (VIS) ................................................................................................................................... - 76 -

Caliopa ........................................................................................................................................................... - 76 -

Chapter 6: Forecast and Analysis ............................................................................................................ - 77 -

6.1 Issues That Will Fuel AOC Market Growth .................................................................................. - 77 -

6.2 Issues That Will Limit AOC Market Growth................................................................................. - 78 -

6.1 Forecast by Protocol & MSAs ...................................................................................................... - 80 -

AOC by Protocols ................................................................................................................................................ - 82 -

Figure 6-2: AOC Unit Shipment Forecast by Protocol 2011 & 2016 ............................................................... - 82 -

Table 6-1: AOC Unit Shipment Forecast by Protocol 2007 - 2016 .................................................................. - 83 -

Figure 6-3: AOC Unit Shipment Forecast by Protocol 2007 - 2016 ................................................................. - 83 -

AOC by Protocol Analysis ................................................................................................................................... - 84 -

Direct Attach copper – Active and Passive ......................................................................................................... - 84 -

10GBASE-T .......................................................................................................................................................... - 85 -

6.2 Unit Shipments Forecast and Analysis ........................................................................................ - 86 -

Figure 6-4: Unit Shipments Forecast by Data Rate 2007-2016 ...................................................................... - 86 -

Table 6-2: AOC Unit Shipment Forecast 2007-2016 ....................................................................................... - 87 -

Figure 6-5: 4-Channel Shipments Forecast by Data Rate 2007-2016 ............................................................. - 88 -

Analyzing the 4x Shipment Data .................................................................................................................... - 89 -

Figure 6-6: 12-Channel Shipments Forecast by Data Rate 2007-2016 ........................................................... - 90 -

Figure 6-6: 12-Channel Shipments Forecast by Data Rate 2007-2016 ........................................................... - 91 -

Analyzing the 12x Shipment Data .................................................................................................................. - 91 -

Figure 6-7: 8 & 16-Channel Shipments Forecast by Data Rate 2007-2016 .................................................... - 92 -

Analyzing the 8x & 16x Shipment Data .......................................................................................................... - 93 -

6.3 Pricing Forecast and Analysis ...................................................................................................... - 94 -

Analyzing the 4x Pricing Data ........................................................................................................................ - 94 -

Table 6-3: AOC Pricing Forecast 2007-2016 ................................................................................................... - 95 -

Figure 6-8: 4-Channel AOC Pricing Forecast 2007-2016 ................................................................................ - 96 -

Analyzing the 12x Pricing Data ...................................................................................................................... - 96 -

Analyzing the 8x and 16x Pricing Data ........................................................................................................... - 97 -

Figure 6-9: 8& 16-Channel AOC Pricing Forecast 2007-2016 ......................................................................... - 97 -

Analyzing the 4x and 12x Pricing Data for Different Data rates .................................................................... - 98 -

Figure 6-10: 12-Channel AOC Pricing Forecast 2007-2015 ............................................................................ - 98 -

Figure 6-11: Three 4x10G verses Single 12x 10G AOC Pricing Deltas ............................................................. - 99 -

Figure 6-11: Three 4x10G verses Single 12x 10G AOC Pricing Deltas ........................................................... - 100 -

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6.4 Revenue Forecast and Analysis ................................................................................................. - 101 -

Revenue Analysis .............................................................................................................................................. - 101 -

Table 6-3: AOC Revenue Forecast 2009-2015 .............................................................................................. - 102 -

Figure 6-12: All Channel Types, AOC Revenue Forecast 2007-2015 ............................................................. - 103 -

Figure 6-13: 4-Channel AOC Revenue Forecast 2007-2016.......................................................................... - 104 -

Figure 6-14: 12-Channel AOC Revenue Forecast 2007-2015........................................................................ - 105 -

Figure 6-15: 8 & 16-Channel AOC Revenue Forecast 2007-2015 ................................................................. - 106 -

Chapter 7: Commercial Video, Consumer and Embedded AOCs .......................................................... - 107 -

7.1 Commercial Video AOCs for Digital Signage, Professional Video Systems, etc. ....................... - 107 -

Strong Competition from Copper ..................................................................................................................... - 107 -

Trends in Favor of AOC Technology ................................................................................................................. - 108 -

Applications ...................................................................................................................................................... - 108 -

Figure 7-1: HDMI & DisplayPort Commercial Video AOCs .......................................................................... - 109 -

Figure 7-2: Digital Signage .......................................................................................................................... - 110 -

Figure 7-3: Studio Video Production............................................................................................................. - 111 -

Figure 7-4: Digital Signage ........................................................................................................................... - 112 -

Figure 7-5: Digital Cinema ........................................................................................................................... - 112 -

Figure 7-6: Zero Client PC terminals ............................................................................................................. - 113 -

Product Requirements ..................................................................................................................................... - 113 -

Analysis ........................................................................................................................................................ - 114 -

HDMI and DisplayPort Video Interconnects 101 .............................................................................................. - 114 -

7.2 Consumer Optic AOCs ............................................................................................................... - 115 -

Applications - Digital living rooms .................................................................................................................... - 115 -

Figure 7-7: Digital Living Rooms .................................................................................................................. - 116 -

Laptop/Tablet -to-HDTV -The Big Unknown..................................................................................................... - 116 -

Real Market Need or Wishful Thinking? .......................................................................................................... - 116 -

The “Need for Speed” – is Missing ............................................................................................................... - 117 -

Figure 7-8: Copper 5G USB and 10G HDMI Consumer Retail Prices ............................................................. - 118 -

Figure 7-9: Thunderbolt ............................................................................................................................... - 118 -

Optical HDMI vs 1.4 at 10.2Gbps ..................................................................................................................... - 118 -

Optical DisplayPort and Thunderbolt ............................................................................................................... - 119 -

About Thunderbolt ....................................................................................................................................... - 119 -

Thunderbolt – Reincarnation of LightPeak? ................................................................................................. - 120 -

Optical USB 3.0 at 5 Gbps ................................................................................................................................. - 121 -

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HDBaseT (HDBT) ............................................................................................................................................... - 121 -

DIIVA – Digital Interactive Interface for Video and Audio at 13.5 Gbps........................................................... - 121 -

Figure 7-10: 2 and 4-Channel Devices from Avago ...................................................................................... - 122 -

Figure 7-11: AOCs for HDMI, DisplayPort and USB ...................................................................................... - 122 -

Figure 7-12: This is the Price Competition in Consumer Interconnects ........................................................ - 123 -

7.3 VSR Embedded AOCs -eAOCs ......................................................................................................... - 124 -

Figure 7-13: Parallel Cables and Micro-coaxial Cables ............................................................................... - 125 -

Figure 7-14: 20Mpixel Camera Chip Soon to be inside Smartphones .......................................................... - 126 -

Figure 7-15: LVDS Vs M-PHY Architecture .................................................................................................... - 126 -

Applications ...................................................................................................................................................... - 127 -

Standard Organizations .................................................................................................................................... - 127 -

What is a VSR Embedded AOC? ....................................................................................................................... - 127 -

Figure 7-16: VSR Embedded AOC Examples ................................................................................................. - 128 -

Embedded AOC Product Features .................................................................................................................... - 129 -

What is Embedded DisplayPort (eDP)? ............................................................................................................ - 129 -

Figure 7-17: eDP Application Inside an Ultrabook ...................................................................................... - 130 -

What is MIPI? ................................................................................................................................................... - 130 -

Figure7-18: MIPI Specifications .................................................................................................................... - 130 -

Figure 7-19: LVDS and MIPI Link Block Diagram .......................................................................................... - 131 -

Figure7-20: MIPI Smartphone Block Diagram .............................................................................................. - 131 -

Figure 7-21: Old Parallel Cabling Examples of Where Embedded AOCs Will Be Used ................................. - 132 -

Figure: 7-22 Copper Ribbon Cables Used in Cell Phones Today ................................................................... - 133 -

Figure: 7-23 What Is Headed to Data Center Systems ................................................................................. - 134 -

Market Trends .................................................................................................................................................. - 134 -

7.4 Forecast ........................................................................................................................................... - 134 -

Figure 7-24: Unit Forecast for VSR Embedded AOCs for HDTVs, Video Equipment, Notebooks, Tablets, and

Smartphones ................................................................................................................................................ - 135 -

Figure 7-25: Revenue Forecast for VSR Embedded AOCs for HDTVs, Video Equipment, Notebooks, Tablets, and

Smartphones ................................................................................................................................................ - 136 -

Table 7-1: Revenue, Average Selling Prices and Units Forecast ................................................................... - 137 -

Challenge for the Optical industry ................................................................................................................... - 137 -

7.5 The AOC Analysis and Forecast Methodology .......................................................................... - 138 -

Why The AOC Business is Unpredictable ......................................................................................................... - 138 -

Research Methodology .................................................................................................................................... - 138 -

Conclusions ........................................................................................................................................... - 140 -

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Appendix 1: AOC History and Technology Development ..................................................................... - 141 -

A.1 Market Hype and Distortions Created Unrealistic Expectations .............................................. - 142 -

A.2 How AOCs Got Started .................................................................................................................... - 143 -

2006-2008 ........................................................................................................................................................ - 143 -

Figure A-1: IBM’s Roadrunner HPC Showing AOCs & Optical Cables ........................................................... - 144 -

2009-2010 ........................................................................................................................................................ - 144 -

4-channel QSFP Form Factor Kick Starts the AOC Market ........................................................................... - 144 -

12-Channel CXP Form factor Tries Hard to Become Established .................................................................. - 144 -

Figure A-2: 4- and 12-Channel MSAs CX-12, iPass and QSFP & CXP ............................................................ - 145 -

Figure A-3: 2009 Sun Microsystems Constellation Subsystem Supporting 12x10Gbps CXP AOCs ............... - 146 -

2010-2011 ........................................................................................................................................................ - 147 -

Figure A-5: IBM’s BlueGene HPC ................................................................................................................. - 147 -

Figure A-5: China’s Tianhe-1A HPC ............................................................................................................. - 148 -

Figure A-6: Japan’s Fujitsu K Computer ....................................................................................................... - 148 -

Appendix 2: LightTrends Newsletter Articles ....................................................................................... - 149 -

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Report Objective

This report is the result of LightCounting’s seven-plus year deep understanding of the optical transceiver

business and the end markets that drive the business. LightCounting’s analysts have studied the AOC

segment for over four years and with this publication examines the demand-pull and supply-side factors

that drive and creates the markets for AOCs. LightCounting attempts to present “realistic forecasts”

based on top-down and bottoms-up research methodology and a set of forecast tools. Our methodology

is based on receiving confidential actual shipment information from suppliers and by not reporting in our

publications, discussing or presenting vendor specific revenues, shipments and market share information.

Many times in our data, LightCounting sees the reality of what is actually shipping is very different from

the hype and press seen in the market place. We count “deployed ports” not just blank ports. Business

managers that get caught up in the hype can make the wrong strategy decisions or market timing issues

LightCounting attempts to provide a reliable business tool for operating executives to plan and run their

business and a little less for the PR & IR departments.

Research Methodology

On the supply side, we interviewed most suppliers in the AOC and transceiver supply chain

including lasers, detectors, fiber, MSAs, semiconductors etc and AOC cable suppliers.

On the demand side, we interviewed server, HPC, storage, switch and routing, telecom,

consumer system suppliers.

Researched Internet material and announcements.

Combined this research with LightCounting’s 10+ year transceiver interconnect history and

forecast model.

Report Organization

The first section reports what happened in 2011 with a prediction of likely action in 2012.

This is followed by a longer term view 2013-2016 where many complicating factors may come

into play.

Then the AOC market summary and analysis of products, protocols, MSAs and data rates is

examined along with the changes in the competitive landscape.

The Forecast section is where all the numbers are grouped with the 5-year history and forecast

and more detail on each issue.

New to this issue of the report is analysis of the Video, Consumer and Embedded AOC segments

with a separate forecast as the market is very different.

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Executive Summary

The AOC market has run the gauntlet of challenges in 2011 unlike any other year before from numerous

consolidating acquisitions, to the entry of Asian based, low cost suppliers pummeling prices, earthquakes

and tsunamis in Japan, to flooding of manufacturing sources in Taiwan and finally intellectual property

battles over who owns what.

AOCs emerged in 2007 and are now poised to spread to nearly every segment in high-speed data and

video communications. Starting out in High-Performance Computers (HPC) and now spreading to

traditional data centers with multiple protocols, AOCs are gaining more and more traction in Video, and

Consumer segments in applications needing long reach. Embedded AOC are a new segment emerging

for tablets, notebooks, and smartphones internal links needing the EMI immunity those optical offers.

In 2011, the market grew 73% to $68.9 million and to 305,260 units at 106% blowing out our previous

forecast. The segment is forecasted to grow to $175 million and 786,000 units by 2016.

Additionally, we also forecasted the Video, Consumer and Embedded AOC segments separately as those

market dynamics are very different from HPCs and data centers an our data is incomplete besides being

filled with high uncertainty of events. These segments do not represent a major market until late in the

forecast. Then, depending on events, the forecast could swing as much as 50% in either direction!

In 2011 we estimate that the Video, Consumer and Embedded AOC market represents $3 million and

20,000 units growing to $126 million and ~40 million units by 2016.

Numerous events in products and M&As in the entire food chain from servers and switches to AOCs and

components altered the entire competitive landscape. Increased adoption of AOCs in the Top100 HCs

and Ethernet data centers fueled market growth. Asian-based manufacturers entered in a big way

chasing Chinese HPC deals and driving prices down to new lows using AOC assembly kits.

The InfiniBand market represents the largest share today and is moving on to 14G FDR QSFP while

traditional data centers are sticking with 10G QSFP formats. Other protocols such as SAS, Fibre Channel

and PCI Express are queuing up to join AOCs as their data rates enter the 10G sweet spot.

Lastly, Video and Consumer AOCs using HDMI, DisplayPort, and USB protocols are starting to gain more

traction. With the “optical Thunderbolt factor” yet unknown looming on the horizon, it’s anyone’s guess

what will happen next but mid-2012 looks likely. Embedded AOC segments area forming targeting VSR

5.6G in notebooks, tablets and smartphones with staggering unit volumes and low prices from what the

optical community Is used to.

More and more protocols are moving to higher line rates where copper links start to have “issues” with

reach and EMI and where AOCs offer strong benefits of high data rate, long reach and low price. This is

fueling the AOC business is poised to grow significantly and spread to all corners of high-speed

interconnects.

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