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Uncle Sam: Major VC for Optical Gear Development Indefinitely?

October, 2014

Where will the money come from to fund R&D for next generations of fiber optic equipment in the telecommunications and data communications markets? Clearly, the vendors will have enough trouble just keeping up with the changes on existing equipment in what are many cases relatively low-margin businesses – and will be quite hesitant to move ahead significantly on next-gen devices before they get an adequate return on their original investments, including 100G. Despite the heavy amount of cash going into silicon photonics, the increasingly pessimistic outlook for its future could easily result in the last straw for venture capital firms for an extremely long time, which almost assuredly to this day have not fully received their money back on devices at much lower speeds, including those systems operating at 10 megabits and at 10 gigabits. Certainly, the situation of getting an adequate...

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OpSIS’ Demise: Politically Incorrect Si Photonic Wafers

October, 2014

This past July, OpSIS announced that the program funding its core operations for silicon photonic Multi-Project Wafers (MPWs) had ended and that it would cease operations. Evidently, the US government around that time was uninterested in supporting the continued existence of the foundry, which had been receiving all of its capital from the private sector. Only about a few months later, the Administration along with the Department of Defense (DOD) apparently changed its mind on the importance of such MPWs, as the White House came out with its $200 million initiative – in effect, making OpSIS a loser before the Integrated Photonics Manufacturing Institute (IPMI) was even established. A fundamental problem with public-private partnerships is that it not only puts the government in the position of picking the winners of technological solutions, but the actual players involved in the game....

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Intel Behind $200M Photonics Competition?

October, 2014

The US government did not call it a “silicon photonics contest.” Perhaps the federal funding for this new Institute for Manufacturing Innovation (IMI) would permit Intel and others to gradually shift to more of a generic term for its future development of chips that includes optics, but would not necessarily involve silicon. Actually, in a recent announcement, IBM implied that its new $3 billion, five-year plan for chip development, might not comprise Si photonics. IMI is quite reminiscent of SEMATECH (SEmiconductor MAnufacturing TECHnology), incorporated in 1987, which became a not-for-profit consortium that included the US Department of Defense (DOD) as well as semiconductor suppliers and educational institutions. Its main purpose was to grab back leadership on market share with chips, which was taken away by Japanese companies. There seemed little doubt that early on, Intel was...

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A Kaiam Strategic Partner: Google?

September, 2014

Concerning the recent $35 million announcement by Kaiam of equity funding, our intelligence indicates that one of the two strategic partners is Google. We also think the other partner is Microsoft. In addition, we believe that the total valuation is two to three times revenue -- so over $70 million. While Kaiam has clever packaging, we are not convinced that it has the lowest cost in the market. Nevertheless, the supplier has benefited from getting out there early in the data center/datacom space. It is likely that it owns the 10x10 business in that sector. Unquestionably, signs of two giant enterprise firm funding Kaiam may be about ensuring direct access to unique 100G technology. Perhaps it is the vendor’s Hybrid Mixer PLC – and/or maybe something else that could possibly be on the drawing board that involves a coherent, serial 100G device. More practically speaking, there is a...

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Videoconferencing: The Elusive Business Application

September, 2014

Although it was 50 years ago that AT&T introduced the Picturephone at the World’s Fair, the company is still striving to “encourage the adoption of videoconferencing” at major corporations today. There has just not been a significant cultural shift in the business community to making deals without shaking hands in person. Yet, there are also very practical considerations in videoconferencing providing an inadequate sense of being in the room, and not allowing for a close consideration of body language to assess the impact of a presentation. While webinars have undoubtedly reduced the amount of traveling substantially in prequalifying sales prospects in offering graphical video displays in communications, there is no real need to have a live picture of the people in the conversation. So, videoconferencing is partly about using a solution in which there is not a problem. Also,...

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Finisar Getting a Raw Deal with Silicon Photonics

September, 2014

When it comes to technology development, some of the leading analysts in the financial community have a tendency to blindly follow a template of conventional wisdom. One of the most egregious examples was during the bubble when there was the widespread notion that the need for bandwidth could not be satiated, and service providers were literally being punished for installing insufficient dark fiber. A similar injustice has occurred with Finisar with the imagined threat to the company by the introduction of silicon photonics. These investment firms talk about the “checks” they conduct in drawing their conclusions. Well, how about spending approximately five minutes checking with an objective optical scientist? As we suggested in a recent blog article, it is clear that in general, development of silicon photonics for active components has for several decades been akin to placing a...

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Silicon Photonics: Widespread Usage on Active Components Doubtful

September, 2014

While the amount of industry chatter about silicon photonics rose substantially in 2014, partially because of certain market research firms looking to sell more reports, the technological hurdles, especially with insertion loss, make extensive use of active, combined components, such as for modulators and photodetectors, unlikely in the foreseeable future. Although there have definitely been numerous demonstrations of integrating with these CMOS fabrication processes, like with receivers, both the performance and cost are superior with standard methods. Certainly for passive devices, silicon lends itself quite well to integration, including for AWGs. Instead of using micro optics, combining waveguides with attenuators is being accomplished with Si. With 100G receivers, the delay lines are being integrated with the phase combiners with either silicon or Indium Phosphide. Given the...

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The Guts of the CFP2

August, 2014

For the next generation of 100G coherent line interface form factor CFP2, will it be a split implementation -- analog CFP2 and separate digital DSP ASIC for the card? Can both parts be integrated into the single package? As far as we know, it will be split. While today, there is one 100G on a card, etc., with CFP2, there will be at least two on a board. There is no question that it would be desirable to use the same DSP for both. However, the industry has gone back to the 1990s in which 100G customers, such as Alcatel-Lucent, Cisco Systems, etc., each have their own DSP, and they believe that to be their secret sauce -- and that is why the DSP is coming out of separate packages. (written by: Alka Swanson)

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25G Laser Shortage

August, 2014

We have been told that there is going to be a worldwide shortage of 25G lasers in the coming two years, supposedly due to not enough capacity having been planned by the industry as a whole.  We hadn’t heard anything like this before.  Do you guys know if this is true, and if so, why it happened? A couple of our contacts indicate that supply is down because of unexpected demand by a few data center operators as well as a greater need for customized optics, and that 25G lasers have inherently lower manufacturing yields than is the case, say with 10G devices. Specifically, the 25G DMLs are in short supply, not the EML devices. However, the EMLs are very expensive, especially for short-distance applications. There is also apprehension that expanding production will create a long-term overcapacity situation, once the market gets back to normal levels. In the meantime, it has become a...

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Big Need for MPLS-TP?

August, 2014

At the service providers across the globe, the most widespread and native selection is MPLS and not MPLS-TP. The former has broader acceptance, superior interoperability, and operational intimacy for the engineering folks. In Asia, particularly China, MPLS-TP has taken off in a big way. While some industry observers view that part of the world as exceptionally unpredictable and may suggest that “TP” could even be replaced, it seems that at least one of the large Chinese operators has such a critical mass of deployment that such a move is not imaginable. On its face, one would think customers should want to go with MPLS-TP over MPLS because the former is a newer version. Ordinarily, any supplier that would happen to start product development from scratch would definitely be inclined to begin in the “TP” direction. Theoretically, MPLS-TP should be a slam-dunk in a greenfield...

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Impact of Cisco Systems’ Purchase of Tail-f?

August, 2014

What happens to Tail-f and to all of its customers after the acquisition by Cisco? Do those customers have to find a new partner? Will Cisco keep it open to all vendors and competitors? Does Cisco imbed it and no longer allow access to third parties? Each customer probably had an agreement with Tail-f in case of an acquisition. It may be on a case-by-case basis, but in terms a macro answer, these days, there are not purchases without putting in a clause for M&A. For small suppliers, it can be quite detrimental. For example, regarding a component company that was purchased in 2013, large module and system suppliers, such as Finisar, Juniper, etc., put in a stipulation that if the vendor was acquired, and did not supply the devices at ridiculously low prices, then they can take hold of the IP, and produce them somewhere else. It is a Catch 22 situation. If one refuses to sign such a...

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