Glossary and definitions 2

Table of contents 4

Scope of the report 6

What we got right, what we got wrong 12

2019-2020 Silicon photonics noteworthy news 13

Executive summary 15

Context 44

• Covid-19 impact
• Motivations for silicon photonics
• Comparison of silicon photonics with other PIC platforms
• Example of products

Market forecasts 59

• Silicon photonic revenue forecast
• Silicon revenues by application
• Silicon photonic shipments per application
• Silicon photonic shipments for datacenters
• Silicon photonic markets for datacenters
• SOI wafers for silicon photonics
• Automotive LiDAR market

Market trends 71

• Introduction to optical communications
• Datacenters
• Long haul
• 5G
• Sensors
• Medical
• Computing

Market shares and supply chain 129

• Overview of silicon photonic players
• Silicon photonic foundries
• Acquisitions by Cisco related to silicon photonics
• SiPh industrial landscape
• Supply chain

• Consolidation still underway
• SiPh supply chain for optical transceivers
• Readiness of silicon photonic players
• Player positioning in production
• Silicon photonic transceiver products
• Players involved in co-packaged optics
• Silicon photonic LiDAR
• Quantum computing players

Technology trends 155

• Technology trends in optical communication
• Transceivers and silicon photonics
• LiDAR technology
• FOG technology
• Medical
• Computing

Reverse Costing® – Structure, process and cost analyses 203

• Intel 100G PSM4 SiPh transceiver
• Intel 100G CWDM4 SiPh transceiver

Outlooks 206

• Roadmap for silicon photonics
• Conclusions

About Yole Développement 213

A GROWING MARKET WITH NEW POTENTIAL APPLICATIONS

Integrated optics was first proposed by Stewart E. Miller from Bell Labs in 1969. The idea was to integrate complex optical functions in a single device using photographic techniques. The result would be miniaturized devices, improved efficiency and reliability, and reduced costs. After bumpy developments due partly to the bursting of the Internet bubble in 2000, several optical transceivers based on silicon photonics were released during the 2010s, the major players being Intel, Acacia, and Luxtera.

Last year, shipments of silicon photonic transceivers for datacenters reached almost 3.5 million units, for revenues worth $364M. This is impressive growth since most products appeared in 2016 and 2017. Silicon photonic transceivers are reported to have better reliability and lower price than transceivers using legacy optics.
This growth is expected to continue in coming years. One reason is that global network traffic doubles every three years thanks to applications in Cloud, video streaming, and the Internet of Things (IoT). As a result, the silicon photonic transceiver market is expected to be worth $3.6B in 2025 with 24 million units shipped.

The development of silicon photonic transceivers as an industry with millions of units shipped has resulted in the emergence of an ecosystem with Process Design Kits (PDKs), design rules, simulation software, testing equipment, and foundries. This ecosystem is enabling new companies to easily access this technology and enter new applications. Genalyte, a Californian company, will release immunoassays using silicon photonics this year. Fiber optic gyroscopes using silicon photonics were announced for this year by KVH. Electronic noses, LiDARs, and Optical Computed Tomography (OCT), all relying on silicon photonics, are under development and expected in coming years.

CO-PACKAGED OPTICS IN LINE OF SIGHT

Although silicon photonics brings advantages to optical transceivers (better reliability, lower costs), it is not yet mandatory. But things could change in the next five years. The data rate of network switches and transceivers is doubling every 18 months. Today switches data rate is 5Tbps and will reach 51.2Tbps in 2025. Transceivers data rate will increase from 100Gbps to 800Gps and the number of transceivers per switch will grow from 4 to 16 or 32. Therefore the density of data transfer in switches will increase tremendously, resulting in important integration and thermal challenges.

Co-Packaged Optics (CPO) is key to enable switches at 51.2Tbps. To reduce thermal losses, optical fibers must be placed close to the switch Application Specific Integrated Circuit (ASIC), its powerful processing unit. In co-packaged optics, all the elements of the transceivers, now designated as photonic engines and comprising lasers, modulators, photodetectors, drivers and optics, and the switch ASIC, are packaged in the same device. The result is a compact, integrated, system with lower losses and better thermal
management.

Several companies are developing CPO technologies, targeting products around 2025. Intel has demonstrated a prototype in March 2020 with photonic engines reaching 1.6Tbps in which the co-packaging is realized with an interposer. Also in March 2020, Rockley Photonics, with Accton, Molex, and TE Connectivity, has demonstrated a switch using CPO with 6Tbps with board copackaging. Many other companies are involved in CPO including Microsoft and Facebook which are collaborating on standards.

SILICON PHOTONICS IS ATTRACTING NEW PLAYERS

Silicon photonics is a great technology for optical communications, allowing more reliable and cheaper products, and enabling the high data rate densities that will be needed in five years for switches. It has attracted important players in datacom infrastructure. Cisco acquired Lightwire in 2012 for $217M, and in 2019 it bought both Luxtera for $660M and Acacia for $2.6B. Luxtera has 35% of the market share in silicon photonic transceivers for datacom, while Acacia is the main player for silicon photonic transceivers for long haul. Intel, which is marketing servers, has 60% market share in silicon photonic transceivers for datacom.

This tendency of vertical integration is continuing, and silicon photonics seems to be an opportunity for system companies to enter the transceiver market. This is the case for Juniper Networks, a leader in routers and switches, which acquired Aurrion in 2016 for $165M and which is preparing 400ZR silicon photonics transceivers. Fujitsu Optical Networks is proposing 400ZR silicon photonic transceivers. Nokia acquired Elenion in February 2020.

However, diversity is key for businesses to operate smoothly. Other companies like Inphi and NeoPhotonics are proposing silicon photonic transceivers with strong technologies. HPE is developing a platform for the development of silicon photonics with several partners. China also has strong ambitions for 5G and Cloud datacenters. Several Chinese companies are entering the silicon photonic market, usually with Western companies. Alibaba Cloud is collaborating with Elenion, Hengtong with Rockley Photonics, and Broadex with Sicoya.

Silicon photonics has shipped millions of units of optical transceivers. It is expected to be a key technology for network switches in the next five years with CPO. The number of companies interested in silicon photonics is impressive. Silicon photonics has become an established industry and will enable new applications in coming years.

Acacia, Accton, Alibaba Cloud, Amazon, amf, ams, Analog Photonics, Anello, AOI, Aryballe, at&t, Axalume, Ayar Labs, Broadcom, Broadex, Caliopa, CeliO, Ciena, Cisco, Elenion, Ericsson, Facebook, Fiberhome, Finisar, Fujitsu, Fujitsu Optical Components, Genalyte, GlobalFoundries, Google, Hengtong, HPE, Huawei, Hyperlight, IBM, II-VI, Infinera, InPhi, Intel, IQE, Iris Light Technologies , Juniper, Kaiam, KVH, Leoni, Lightwave Logic, Lumentum, Luxtera, MACOM, Microsoft, Molex, NEC, NeoPhotonics, Nokia, NTT, NTT Electronics, NXP, Orange Labs, POET, Ranovus, Rockley Photonics, Roshmere, Scintil Photonics, Senko, Sentea, ShinEtsu, Sicoya, SiLC, Silex, Silterra, Skorpios, Skywater, SOITEC, Sumitomo Electric, TE Connectivity, Teraxion, TowerJazz, TSMC, VTT and more.