Active Optical Cabling: A Technology Assessment and Market Forecast

Published: September 23, 2009

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The converging bandwidth and form-factor demands of data center, PC interconnect, and consumer electronics has led to an industry-wide drive to re-package parallel optics in an easy-to-use cable bundle; the active optical cable (AOC). Cynics may point out that there have been efforts like this before, but better lasers and improvements in both fiber media and the optoelectronics inside transceiver modules suggest that this time around AOCs will generate significant new business revenues for the optical networking business.

As a result, AOC technology is attracting interest from some of the biggest name in fiber optic networking components and modules including Finisar, Intel, and Tyco, as well as more specialist companies such as Lightwire, Luxtera, Reflex Photonics, Tyco and Zarlink. Meanwhile, the AOC "movement" has achieved added credibility through the decision of the Small Form Factor group within the T11 Technical Committee, to standardize a common module for Fibre Channel, InfiniBand, SAS, and Ethernet, called SFF-8436. By attaching such a physical device to an optical fiber during manufacturing, the developer of an AOC allows a customer to remove a copper-based pluggable transceiver and plug in an optical replacement. For the unsophisticated owner of a PC or server, clustering a device with AOC can be as simple as connecting an Ethernet cable. And while the initial markets for AOCs will all be very-short reach, several firms are already developing AOCs with reaches capable of supporting campus networks.

All this sounds very exciting; a new opportunity at a time when the optical networking business is going through hard times again. However, optical networking has overreached in the marketplace in the past and with disastrous results.

With this in mind, this report provides a realistic assessment of the prospects for AOCs in all the markets to which it is being targeted; data centers and enterprise networks, home theater and consumer electronics, signage, instrumentation, and personal electronics. As part of its goal to analyze and quantify the market for AOCs in this sector, CIR also compares AOC to other low-cost optical interfaces (including the simplified serial optics embodied in the new USB 3.0.) and also the latest in copper connectivity.

The report contains a granular five-year forecast of the AOC market with a consideration of multiple scenarios in new - but potentially large - markets such as personal computing and home video. It also considers supply chain issues and how firms that have traditionally supplied products for high-end data center or telecom applications can break into mass markets of this kind.

Although this report covers a new area, it draws on CIR's decades-long experience on covering opportunities in the transceiver/transponder and laser business and we believe that it will be essential reading for strategic planners and marketing managers at manufacturers of cabling, components, transceiver/transponders, equipment and consumer electronics.

Table of Contents

Executive Summary

E.1 Introduction
E.1.1 QSFP as Enablers for the AOC Market
E.1.2 Summary of Major Opportunities in the Active Optical Cabling Market
E.1.3 Opportunities for Active Optical Cabling Assembly Manufacturers
E.1.4 Opportunities for Component (Connector and Laser) Firms
E.1.5 The Special Case of Active Copper Cable
E.1.6 Opportunities for Fiber Suppliers
E.2 Firms to Watch in the AOC Business
E.2.1 Avago Technologies
E.2.2 Finisar
E.2.3 Emcore Connects Cables (Intel)
E.2.4 Lightwire
E.2.5 Luxtera
E.2.6 Reflex Photonics
E.2.7 Tyco Electronics
E.2.8 Zarlink
E.2.9 MergeOptics GmbH
E.2.10 Gevista Technology Co. Ltd.
E.2.11 Other Market Entrants
E.3 Summary of Five-Year Forecasts of Optical Cabling Markets

Chapter One: Introduction

1.1 Background to this Report
1.1.1 AOCs: Opportunities and Risks
1.1.2 The Breadth of AOCs Market Reach
1.1.3 AOCs and the Reemergence of Parallel Optics
1.2 Objectives of this Report 37
1.3 Scope of this Report
1.4 Methodology and Information Sources for Report
1.5 Plan of this Report

Chapter Two: Active Optical Markets: Data Centers and Enterprise Networks

2.1 Evolution of Active Optical Cabling Products in the Corporate Environment
2.1.1 The Impact of 10-Gbit Ethernet
2.1.2 40/100 Gbps Active Optical Cabling Products
2.2 AOC in the InfiniBand Market
2.2.1 CX-4 Replacement
2.2.2 QSFP Replacement
2.3 Active Optical Cabling in the Serial Ethernet Environment
2.4 Active Optical Cabling in the Campus Environment
2.5 Standards for Active Optical Cabling
2.6 The Network Manager's Perspective: An Assessment of the advantages of AOCs for Corporate Users

Chapter Three: Active Optical Markets: PCs and Other Computer Applications

3.1 Current Requirements for High-Speed Interfaces on and in PCs
3.2 Intel's Vision of Active Optical Cabling as the Universal Optical Interface for PCs
3.3 Addressable Market Segments for Active Optical Cables in the Computer Sector
3.3.1 External Interfaces
3.3.2 LAN-On Motherboard (LOM)
3.3.3 Active Optical Cabling for Board-to-Board Communications
3.4 PC Industry Perspective on Active Optical Cabling
3.5 Challenges for Active Optical Cabling in the PC and Other Computer Markets
3.6 Assessment of the Active Optical Cabling Industry's Ability to Enter the PC Market
3.6.1 Likely Market Entry Strategies

Chapter Four: Consumer Electronics and Other Display Applications

4.1 Current Requirements for High-speed Interfaces in Consumer Electronics
4.2 AOC Vendors' Visions of Active Optical Cabling for Videophiles
4.3 Addressable Consumer Markets in Home Entertainment and Digital Signage
4.3.1 Active Optical Cabling and HDMI
4.3.2 Active Optical Cabling and DisplayPort
4.3.3 Active Optical Cabling and SuperSpeed USB
4.3.4 Active Optical Cabling in Home Theater Applications
4.3.5 Active Optical Cabling and the Digital Signage Market
4.4 A Consumer Electronics Perspective on Active Optical Cabling Industry

Chapter Five: Market Forecasts

5.1 Forecasting Methodology
5.2 Forecast of Active Optical Cabling by End-User Market
5.2.1 Data Center Applications for AOCs
5.2.2 Digital Signage Applications for AOCs
5.2.3 PC Interconnect Applications for AOCs
5.3 Forecast of Active Optical Cabling by Protocols/Connectors Used
5.3.1 Protocols
5.4 Forecast of Active Optical Cabling by Length of Cable Used
5.5 Summary of AOC Forecasts
Acronyms and Abbreviations Used in this Report
About the Author

List of Exhibits

Exhibit E-1: VCSEL Cross Section
Exhibit E-2: SFP, QSFP Modules
Exhibit E-3: Common Multi-Source Agreement Modules
Exhibit E-4: Finisar's CWire (left) and Quadwire (right)
Exhibit E-5: Blazar AOC
Exhibit E-6: Tyco ParaLight Cable
Exhibit E-7: Zarlink's ZLynx Cable
Exhibit E-8: AOC Shipments by Market Value ($ Millions)
Exhibit 2-1: XGMII to XAUI Signal Transition
Exhibit 2-2: Early SFP Module from Finisar
Exhibit 2-3: CFP Mockup Modules
Exhibit 5-1: Data Center Active Optical Cabling Market, 2009-2017
Exhibit 5-2: Digital Signage Active Optical Cabling Market, 2009-2017
Exhibit 5-3: PC Interconnect Active Optical Cabling Market, 2009-2017
Exhibit 5-4: Home Theater Active Optical Cabling Market, 2009-2017
Exhibit 5-5: Protocols Used With AOCs
Exhibit 5-6: Connectors Used With AOCs
Exhibit 5-7: AOC Cable by Length
Exhibit 5-8: AOC Shipments by Volume (Millions)
Exhibit 5-9: AOC Shipments by Market Value ($ Millions)