THE YEAR AHEAD ANALYSTS
A RENAISSANCE OF CO- PACKAGED OPTICS IN 2022? Lawrence Gasman, president, Communications Industry Researchers (CIR) “In early 2021 co-packaged optics (CPO) placed to become the big data center theme of the year. CPO-related product announcements and standards flowed. CPO sessions and panels dominated important conferences. CIR’s market study “Co-packaged Optics Market 2021-2025” (https://cir-inc.com/reports/ co-packaged-optics-markets1799/) was widely read. By the second half of 2021 the CPO fuss had declined. CIR believes that we will see a renaissance in interest in CPO. Timing remains uncertain, but it is hard to avoid the conclusion that, barring a breakthrough in optoelectronic materials, the success of CPO is inevitable. The AI/ML revolution begins: Until now the need for network speed has been driven by video traffic. About 90 percent of traffic is now video. We are now in a new era where latency-sensitive traffic will become pre-eminent. AI and machine learning (ML) traffic will have to be dealt with and virtual reality (VR) is being reborn as the “multiverse.” Like video, the evolution of latency sensitive networks may start slow. Then everything will happen at once – typical exponential growth in fact. A variety of techniques may be applied to solve the latency problem, but higher bandwidths can help. High data rate interconnects like CPO are only part of dealing with latency issues but they are part of it. From switching generations to the rack: CPO is currently driven by new switching generations. Each generation has greater capacity -- room for more/ higher-capacity transceivers, but increasingly demanding in terms of power. According to Cisco, to achieve the 80x switch bandwidth increase
with the need to minimise power consumption makes the ultimate victory of CPO certain. For 2022, however, we don’t expect too much drama around CPO – significant launches of CPO switches, most notably, and steady progress on the standards front.”
from 640 Gbps to 51.2 Tbps the power utilised by the switch increases by 9.5x. So power efficiency gets a lot better but the absolute power demand continues inexorably to increase. CPO comes to the rescue by bringing the optics and electronics closer together. The closer two devices get the lower the power needed takes to transmit a signal between them. In CPO the optical engine is shifted into the switching silicon package saving significant amounts of power. This switching story is dominant in accounts of CPO today; it reflects the current switching environment where the vendors are primarily concerned with doing something about the sudden switching port count bottleneck created by the arrival of commercial 800G and the need for switches that can accommodate 800G ports. There will be no significant revenues from 800G transceivers unless switches that can accommodate a reasonable number of 800G transceivers come into being. And a CPO-based 51.2 switch design is much more power-efficient than a traditional 51.2 Tbps with pluggable optics. It is likely a 51.2 Tbps switch device will arrive in 2022. Then switching evolution will continue, with power considerations making it harder to build switches without CPO with each generation. The next generation of switches – 102.4 Tbps switches in 2024 or 2025 will all be CPO switches. But after 51.2 switches, the focus of network design will shift from an immediate 800G port “crisis” to the racks. As rack speeds inevitably increase, the DACs and other copper will give way to optical cable. While rack switches mostly will not need CPO right away, they will inevitably, expanding the market for CPO. What to expect from CPO in 2022: All the excitement about CPO at the beginning of 2021 may well have overshot, but the need for speed coupled
Lawrence Gasman is the founder of CIR and has been tracking commercial opportunities in high-speed networking business since 1985. Over the years, he has covered both the optical networking equipment and optical components market and his recent market analysis work has focused on optical data centres, embedded optics, 5G infrastructure and quantum networking. Gasman’s consulting work has included both major multinationals and high-tech start-ups as clients and he has also carried out due diligence work for investment banks, venture capitalists and leading management consulting firms. In addition, he is also the author of numerous articles on the economics of technology and of four books covering telecommunications and nanotechnology.
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INDUSTRY FOCUS 2021/2022
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