Steady progress, but no surprises at ECOC 2018
LightCounting publishes a research note on ECOC
Yes, all roads lead to Rome and the European Congress on Optical Communications (ECOC) found its way to Rome this year. It is comforting that Google Maps worked well even at the “point of singularity.” However, we found the service and air-conditioning in Italy are still emerging industries. Nevertheless, ECOC 2018 was a good show and all the exhibitors and attendees deserve credit for it. Thank you for being there. Attendees will get a break from the heat next year as ECOC 2019 will be held in Dublin. 2019 will become the Guinness year in our calendar.
Highspeed Ethernet optics for mega datacenters is by far the largest business opportunity for suppliers and it was the primary focus of ECOC 2018. Co-packaging of optics and electronics remains a hot topic, perhaps literally, as the realization dawns that future generations of chip I/O will consume too much power to be viable. Progress in 400/600G DWDM components and modules as well as optics for 5G wireless fronthaul were among highlights of ECOC-2018.
LightCounting reported on first shipments of 25G transceivers for wireless fronthaul which started in late 2017 and achieved significant sales volume in the first half of 2018, as detailed in the latest Quarterly Market Update Report.
Source Photonics had a live demo of 25G-LR lite SFP28 modules designed for a 1 km reach and based on lower cost FP (instead of DFB) lasers. More than 10 million 25G modules are expected to be deployed to support 5G installation, so lowering the cost of these modules is critical.
Two new MSAs for 50G optics were announced just ahead of ECOC: DSFP and SFP-DD. The first one seems to be developed for Huawei with improved RF performance from the connector. The second one has received broad support from the industry.
Intel demonstrates operation of 10km reach CWDM4 modules at +85C and -20C (placed in a freezer along with ice cream, as shown in the photo below), targeting applications in 5G fronthaul. This is a noteworthy development for Intel’s transceiver business, which was previously limited to PSM4 and CWDM4 data center products. Some of the MIMO antennas are using 100G connectivity now and demand for 100G optics with an industrial temperature range is expected to be strong. Intel is sampling silicon photonics transceivers for 5G wireless now with mass production due to start in Q1 2019.
Source: Intel, Photo by LightCounting
ZTE is back in business resuming operation very quickly. The latest wave of export tariffs on $200 billion of Chinese made products excluded optical transceivers. Yet, the uncertainly about future steps by the US and China in their trade disputes clouds the industry’s prospects and this was evident at ECOC 2018.
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LightCounting is a leading optical communications market research company, offering semiannual market updates, forecasts, and state-of-the-industry reports based on its analysis of primary research with dozens of leading module, component, and system vendors as well as service providers and other users. LightCounting is the optical communications market’s first choice source for the accurate, detailed, and relevant information necessary for doing business in today’s highly competitive environment. For more information, visit: www.LightCounting.com or follow us on Twitter at @LightCounting.
3D Sensing for Self-Driving Cars Reaches the Peak of Inflated Expectations
LightCounting releases a new report addressing illumination in smartphones and automotive lidarIn 2019, the market for VCSEL (vertical cavity surface-emitting laser) illumination in smartphones will exceed $1.0 billion – now nearly triple the size of the market for communications VCSELs. That’s quite remarkable for a market that didn’t exist three years ago.3D sensing in smartphones felt like an overnight sensation, but the technology foundations were laid down years ago with Microsoft’s Kinect – a motion-sensing peripheral for gamers released in 2010 but discontinued in 2017 after lackluster sales. Lumentum supplied lasers to the Kinect almost a decade before the iPhone opportunity emerged; the company was ready to profit from the iPhone X opportunity when Apple decided to launch 3D sensing for facial recognition in September 2017.
Figure: 3D depth-sensing meets the Gartner Hype Cycle
Source: Gartner with edits by LightCounting
If all technologies follow the Gartner Hype Cycle, shown in the Figure above, then 3D sensing in smartphones is now moving up the slope of enlightenment. Android brands raced to add 3D sensing to their flagship phones in 2018 – the Xiaomi Mi8 Explorer and Oppo Find X phones were first – although these only sold in single digit million quantities. Huawei also brought out new phones with 3D sensing, but the ongoing U.S. export ban on the Chinese company must be hurting the company’s traction outside China. Apple continues to dominate the market as all new iPhones released by Apple since 2017 have included 3D sensing on the front of the phone. Apple is expected to introduce 3D sensing for ‘world-facing’ applications in 2020, which adds another laser chip to every phone.
Last year illumination for lidars were not included in our market forecast since LightCounting considered it unlikely that lidar would penetrate the consumer market to any great extent over the forecast period. All indicators now point to a market for lidar illumination ramping up in 2022 and beyond. Optical components firms are now shipping prototypes and samples of VCSELs, edge emitters and coherent lasers to customers developing next-generation lidar systems – many of them building on their expertise in illumination for optical communications and smartphones.
As was the case with smartphones, the foundations for lidar technology were laid down much earlier – in this case with the DARPA Challenge 2007, where the winning vehicle used a 64-laser lidar system from Velodyne Acoustics (now Velodyne Lidar). Lidar is considered by the majority of the industry to be an essential part of the sensor suite required for autonomous driving, helping the vehicle to navigate through the environment and detect obstacles in its path. The first commercial deployments have begun. In Germany, lidar on the Audi A8 enables the car to drive itself for limited periods under specific conditions. In Phoenix, Arizona, you can hail a ride in a Waymo robotaxi.
Investor enthusiasm for lidar is undeniable with nearly half a billion dollars invested in lidar start-ups in 2019 according to our analysis of publicly available investment data. Notable deals include $60 million for U.S. company Ouster in March, Israel’s Innoviz Technologies Series C round of $132 million in the same month, and $100 million for U.S.-based Luminar Technologies in July. Interestingly, these examples illustrate the variety of lidar approaches: each company is building a different type of lidar based on a different wavelength: 850nm for Ouster, 905nm for Innoviz and 1550nm in the case of Luminar. There’s an open technology battle and they can’t all be winners.
The automotive lidar market seems to be close to the peak of ‘inflated expectations’. It’s easy to understand why. The automotive industry is enormous, with nearly 100 million vehicles (including trucks) produced annually. Players like Baidu, GM Cruise and Waymo are backed by deep corporate pockets, and new entrants like Aurora and Pony.ai are attracting hundreds of millions in investment. Intel’s $15.3 billion purchase of Mobileye in 2017 was also directed at autonomous driving. Sensor company AMS is in a $4.8 billion battle to acquire German semiconductor lighting firm Osram with its eye firmly on lidar.
However, signs indicate that the descent into the trough of disillusionment could have already begun. Waymo has yet to roll out its robotaxi services more widely – and this summer admitted that its vehicles needed more testing in the rain. GM Cruise has delayed launch of commercial services for self-driving cars beyond 2019 and is reluctant to commit to a new timescale, with its CEO Dan Ammann observing that safety is paramount; automotive is not an industry where you can “move fast and break things” he said. A casualty of the slow pace was optical phased array lidar developer Oryx Vision, which closed its doors in August and started to hand money back to investors.
While lidar is being deployed commercially today, prices are not conducive to mass production, and there are open questions around regulation, safety, ethics and consumer acceptance. Do local laws prohibit self-driving cars? Will they really be safer than humans? Who is responsible for a crash? LightCounting remains skeptical about the pace of adoption of autonomous vehicles, but will be watching the market closely and with optimism.
More information on the report is available at: https://www.lightcounting.com/Sensing.cfm.