Have we reached the tipping point before silicon photonics grows massively in data centers?
Exponential data growth in data centers will propel silicon photonics to take off into other applications, like lidar
Big data is getting bigger by the second. Transporting this level of data around with existing technologies will soon reach power consumption, density and weight limits. Photons will continue to replace electrons throughout networks, including in the data center, in the rack and very soon on the board.
Silicon photonics is an exciting technology mixing optics, CMOS technology and advanced packaging. It combines silicon technology’s low cost, higher integration and interconnect density and higher number of embedded functionalities with lower power consumption and better reliability compared to legacy optics.
Massive R&D investments have been made in silicon photonics, but today there are still few products on the market. However, this technology has been strongly pushed by large Webcom companies such as Microsoft, Amazon and Facebook, with investments that will overtake the traditional service providers’ investments in a few years. These Webcom players are targeting $1/Gb prices and are principals for the development of cost-effective photonics technology for future generations of data centers.
Although copper is still used for top-of-rack switches to servers because the connection distance is short, optical links are becoming mandatory as both bandwidth and communication distance increase. And bandwidth is dramatically increasing close to the rack. Consequently most of the current bandwidth is inside the data center, for distances running from a few meters to a few hundreds of kilometers (see figure 1).
Back in 2000, Bookham was first to commercialize silicon photonics components, namely arrayed waveguide gratings and transceivers. Then in 2006, variable optical attenuators were commercialized by Kotura. These companies have been followed by the likes of Acacia and Intel, who commercialized products in 2016, and ever more products are being launched onto the market, mostly for 100G networks, but soon for 400G (figure 2). The next products will be silicon-photonics based transceivers. But we believe silicon photonics will be then used in other products such as optical bio-sensors, gas sensors and lidars for autonomous vehicles.
Moreover, we see new startups coming and this is a very encouraging sign of growing investments from the venture capitalist community. Fifteen years since the ‘dot com bubble’, it seems the optical communication field is attracting investors again.
A multibillion dollar market for silicon photonics in data centers by 2025, with other promising applications as well
The silicon photonics market is still modest with estimated sales below $40M in 2015 and very few companies actually shipping products in the open market. However, we foresee dramatic growth and estimate that the packaged silicon photonics transceiver market will be worth $6B in 10 years.
But besides data centers, which are the best opportunity for silicon photonics technology today, there are many other applications that silicon photonics can enable. These include high performance computers, telecommunications, sensors, life science, quantum computers and other high-end applications.
Two applications are particularly interesting as silicon photonics can push the integration of optical functions and miniaturization further to achieve successful products. Those applications are lidars for autonomous cars and biochemical and chemical sensors.
Lidars are costly and bulky instruments which make their integration in a car challenging. Silicon photonics could allow lidar without moving elements, which can experience issues in a harsh car environment.
Biochemical and gas sensors are not new, and several applications have existed for a while. But we believe that the interest in gas sensing is gaining importance due to the emergence of promising new large volume portable applications. Integration of biochemical or gas sensors into smartphones or wearables is currently on the roadmap of many companies but size, cost and sensitivity are still issues. To push optical gas sensor miniaturization further, some companies are already considering Silicon Photonics as an integration platform for their devices.
These non-data center applications will be about $300M in 2025.
Besides technical challenges, an IC-like supply chain is being consolidated
The path to success is not easy, with challenges still to overcome, especially technical ones.
Laser source integration is a major challenge, for which post-processing of laser dies on InP chiplets is an interesting approach.
Power consumption is also important. Today we are at 10pJ/bit and the target is to lower this below 200fJ/bit by 2025.
The industry also needs to move from parallel fibers to wavelength division multiplexing (WDM). Most players have WDM on their roadmap.
Packaging is still a major technical hurdle, accounting for 80%-90% of final transceiver cost. It is a costly process as optical alignment is tight and it increases assembly time. Here, MEMS can be an enabling technology, as exploited by Kaiam and Luxtera, and many initiatives are set up to deliver low-cost photonic assembly pilot lines, especially in Europe.
These technical challenges link to cost, for which the target objective of $5/Gb today must lower to less than $0.1/Gb after 2020.
The silicon photonics supply chain is still under construction (figure 4), lagging years behind the mainstream silicon semiconductor supply chain, with few packaging service or software providers. However, across the world, large R&D acquisitions and programs are being performed, creating intellectual property (IP) positions for the current players. Opportunities will also certainly arise for outsourced semiconductor assembly and test companies because of the need for low cost packaging solutions. Silicon photonics foundries must emerge. It will happen with increasing wafer volumes driving down costs.
- Updated Silicon Photonics 2015-2025 market forecast (units, US$, wafers)
- Updated market forecasts for Data Centers, High Performance Computing, Telecom, Life Science and Sensors applications
- Updated Silicon Photonics player activity
- New challenges
- Updated information on devices, applications and supply chains