Emergence of PIC Will Lead to Massive Changes in Optical Networks

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 major new report from Heavy Reading, the research division of UBM's Light Reading.

Photonic Integration & the Future of Optical Networking explores and analyzes the PIC market, focusing on the PIC's likely long-term effects on the optical networking industry. The report reviews the development of photonic integration and provides a framework for PIC market segmentation. It provides an overview of the photonic integration market, including the leading approaches for passive and optoelectronic photonic integration, and the primary applications today and over the next five years. The report also analyzes the nascent but potentially disruptive technologies of silicon photonics, including detailed information on commercial and laboratory innovations in this area.

The report profiles and analyzes more than a dozen emerging suppliers in the PIC sector. The findings and analysis in this report are based on four months of in-depth interviews with components suppliers, systems suppliers, network operators, and academic experts from the around the world.

For a list of technology suppliers analyzed in this report, please go to http://img.lightreading.com/heavyreading/pdf/hr20080319_vendors.pdf .

"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. "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 ten years, and beyond."

Conventional electronic integrated circuit 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/s 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 the following:

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 is essential reading for a wide range of industry participants, including the following:

  • Telecom service providers: How will developments in photonic integration affect the economics of delivering ever increasing amounts of bandwidth in your network? What is the most likely migration path for your network equipment from electronic IC-based gear to PIC-based products? What kinds of factors are most likely to drive - or stall - the continued development of PIC technology? Which suppliers are in the best position to meet your needs for next-generation optical products?
  • Telecom equipment manufacturers: How will photonic integration shape supply and demand for next-gen optical equipment? Which PIC technology developers are emerging as the market leaders? Is your company "timing the market" correctly, or is there a chance that your need for PIC will materialize before your suppliers' product portfolios are ready?
  • Component and subsystem suppliers: What is the most likely demand curve scenario for PIC products? Which equipment suppliers are likely to emerge as the early demand leaders in this sector? Where are the market opportunities for your components and subsystems?
  • Investors: How will the emergence of PIC affect the optical networking sector? Which technology providers are likely to emerge as the main suppliers of next-gen optical products, and when are they most likely to reap those benefits?

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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