June 14, 2019

Intel Acquires Barefoot Networks and Broadcom Releases Trident4 ASIC

LightCounting Releases a Research Note on Switching News

This week’s news brought two important announcements in the world of Ethernet switching silicon. These ASICs are at the heart of most networks that need high-speed optical modules. “The Incumbent” [i.e. Broadcom] announced an important new product and Intel announced an interesting acquisition in this same space.

Ethernet switch silicon has fallen into two categories: proprietary silicon (e.g. Cisco) and merchant silicon. To date, Broadcom has dominated the merchant switching silicon market. Switch companies such as Arista Networks base their ability to stay at the leading edge by using merchant switch ASICs from most any merchant supplier.  Even Cisco offers two lines of ToR switches.  One uses Broadcom ASICs and the other uses proprietary Cisco ASICs.

Broadcom built their reputation on 1G and 10G switching silicon in their Trident line in the enterprise space.  Two years ago they claimed 100 million ports operating with Trident-based switches. They parlayed their market strength by leading the market in switch ASICs with 25Gb/s and 50Gb/s SerDes with their Tomahawk line of products.  A high percentage of hyperscale data centers are running with Tomahawk-based switches.
Having huge success means you become a big target and Broadcom now has competition to their Tomahawk ASICs:

  • Mellanox has had success with their Spectrum Ethernet switch ASIC and they offer bare silicon or complete Ethernet switches

  • Marvell/Cavium offers their XPliant® Ethernet switch ASICs which have been chosen by Arista Networks and Brocade [now Extreme Networks]. Arista Networks also uses ASICs from Broadcom and others. But Marvell had their in-house developed Prestera switches which are successful at slower speeds and after acquiring Cavium, they shut down the XPliant® line.

  • Innovium, another startup [with personnel from both Broadcom and Marvell/Cavium] announced their new line of switch ASICs with 50G PAM4 SerDes just prior to OFC 2016. They announced sampling of their 12.8Tb/s switch silicon at the Open Compute Conference in March, 2018. Various 400G demonstrations at OFC 2019 used Innovium switches and they got a design win at Cisco in their Nexus 3000 line.

So should we be surprised to learn this week that Intel will be acquiring Barefoot networks? 

Barefoot Networks came along in 2013 as a startup with Google, Alibaba, Dell, HPE and Tencent among their investors. They sampled a 6.4Tb switch at the end of 2016. It can support 65 100GbE ports. Its scale is similar to Broadcom’s Tomahawk2 with 260 25Gb/s SerDes. Edgecore Networks, a white box switch maker, had made the Facebook Wedge 100BF‑65X switch per an Open Compute specification using ASICs from Barefoot. With strong features for programmability, Barefoot has made a series of wins, though mostly in the lower-volume edge of the networks. Arista 7170 switches having 64 ports of 100GbE use Barefoot switch ASICs. Even Cisco uses Barefoot ASICs in their Cisco Nexus 3000 Series. Barefoot was the first switch ASIC company using 7nm CMOS.

In 2011, Intel attempted to jump into the one space in computers and networking they didn’t serve, switching silicon, by acquiring Fulcrum Microsystems. For whatever reasons, that never made Intel a player in datacenter switching. The acquisition of Barefoot Networks by Intel means we will have two huge companies that offer Ethernet switching. It gives them the opportunity they thought they had with Fulcrum. The timing seems right, since Barefoot is still technically a startup, and gives Intel a do-over in switching.

Slowing spending of the Cloud companies and demand for semiconductor IC probably influenced Barefoot’s decision. Broadcom reported quarterly earnings on June 13 and reduced forecast for the rest of 2019 quoting trade war and very nervous customers. Intel and many other IC suppliers reduced 2018 forecast earlier this year, reducing expectations for a strong second half of 2019. Upcoming Quarterly Market Forecast report will discuss the latest financial results and guidance for the current quarter across the industry supply chain.

The acquisition also fits well with Intel’s long term strategy to co-package optical engines with ASICs. Intel’s in-house silicon photonics (SiP) technology is the best platform for these future opto-electronic systems in a package. Intel dominates the CPU market and acquired Altera’s FPGA’s business a few years ago. All these ASICs may benefit from co-packaged optics in the future, but performance of switching ASICs is likely to improve the most from this new approach. Cisco acquired Luxtera earlier this year with an objective to use their (SiP) technology for integration with ASICs. Broadcom has internal manufacturing of GaAs and InP optical chips, which can also be used for co-packaging, but it may consider to bring SiP technology in house as well to keep up with the competition. Progress in Silicon Photonics is analyzed in the recently published Integrated Optical Devices Report.

For its part, Broadcom made important news this week with their announcement of the Trident 4 series of Ethernet switch ASICs for the enterprise IT market. This market is not shrinking despite the roaring success of the hyperscale cloud players. Many eyes are on the rollout of switches and datacenter networks using Tomahawk 3 ASICs to enable 200GbE, 400GbE and high-density 100GbE. Historically, the enterprise space lags by a few years, but this is changing. Enterprises are quickly rolling out 100GbE and using the Trident 3 switch ASICs introduced two years ago. A 100 million-port customer base waiting for upgrades is a compelling story.

Clients can access full text of the research note at: https://www.lightcounting.com/login.cfm

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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

3D Sensing

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.

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