Oct. 5, 2017

LightCounting has published a Research Note titled “Mobile Fronthaul in the 5G Era”

4G fronthaul has converged on 10Gbps optics

In the past several years, LTE networks have been upgraded using additional frequency bands, carrier aggregation, and LTE-A, and small cells have been added within macrocell coverage areas, driving up fronthaul bandwidth requirements to the point where now many operators and equipment suppliers have standardized on 10Gb/s-capable multi-rate transceivers for all their fronthaul needs, since they can meet the majority of different transport speed requirements with one device, while reducing the complexity of specific site designs and spares inventory.  Many operators, especially those leasing their fronthaul fiber, have also deployed WDM systems in their fronthaul networks, as shown below. A typical fronthaul network incorporating WDM is shown below.

5G fronthaul will need faster optics, but how fast?

Fronthaul requirements will change with the advent of the 5G mobile network. 5G has a target peak bandwidth of 20Gb/s, and to deliver it will utilize higher-frequency spectrum than LTE, in the millimeter wavelength range. The shorter wavelengths enable smaller antennas, which in turn permits the use of much higher-order MIMO antenna arrays. Whereas 4x8 and 8x8 MIMO are considered high-end for LTE, in 5G 64x64 MIMO is possible. And the higher the MIMO number, the greater the bandwidth needed on the corresponding fronthaul link. A second way bandwidth will be increased in 5G is via the use of 100 GHz frequency bands, vs. 20 Ghz in LTE, enabling a single radio to generate 5X more bandwidth that needs to be carried back to the core network from the cell site, everything else being equal.

In anticipation of the potential huge increase in fronthaul bandwidth that would be needed to support 5G radios, mobile equipment makers updated the CPRI specification to something called ‘eCPRI’, (published in August, 2017).  One of the key elements of eCPRI is to move some of the PHY-layer signal processing from the baseband unit to the remote radio head, which reduces fronthaul bandwidth by a factor of 10, in many cases.

When all the different factors affecting fronthaul bandwidth in 5G are added up (some driving it up, others reducing it), the expected bandwidth fall into the range of 14 to 30 Gb/s, depending on specifics of the eCPRI implementation, cell site, etc. In contrast, similar 5G network configuration using the older CPRI scheme which puts all the PHY layer processing in the baseband unit would require 236 Gb/s fronthaul bandwidth. The upshot is that while a 5G cell site would nominally generate 160 Gb/s or more of traffic, the real fronthaul bandwidth needed will be 14-30 Gbps, due to the use of eCPRI.

Similar to how 10Gb/s multi-rate optical modules have become the de facto standard for LTE fronthaul, we believe the next higher standard Ethernet speed will be used in 5G fronthaul. This means we expect to see 25GbE devices used in high volumes in 5G deployments, although some will be Industrial Temperature (I-Temp) and/or bi-directional versions made specifically for fronthaul applications.  

Higher-speed optics (above 25Gb/s) will also be needed in 5G networks

Over the past 12-18 months, LightCounting has heard repeatedly about mobile operators requesting optical transceivers with speeds of 50, 100, and even 400 Gb/s for ‘fronthaul’ or ‘backhaul’. Why such high speeds would be needed has been a real puzzle to figure out. ‘Fronthaul’ has been well-defined by the CPRI consortium for quite some time, but there is no industry consensus definition of wireless backhaul. LightCounting has narrowly defined backhaul as the first optical link originating at the BBU and carrying traffic towards/from the network core. Others expand the definition to include the access, aggregation, and core networks as well. Naturally as 25Gb/s data streams are aggregated going from BBU to the core, 50, 100, and even 400Gb/s transport might be needs. We think this greatly expanded definition of ‘backhaul’ is a possible explanation for the mystery reports of higher-speed backhaul optics. 

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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