Last week, the OFC conference in San Francisco left “the optical communications community with valuable insights into the latest research in the field, current products and services on the market today and future industry trends.”
Jimmy Yu, our VP of Optical Transport market research, presented to the Photonic Society of Chinese-Americans at OFC. Jimmy delivered his thoughts about what’s next in Optical Networking to a captivated audience.
One of the highlights of Jimmy’s presentation was his insight into the DWDM Long Haul and WDM Metro markets. See figure below:
As is typical, the adoption of higher speed wavelengths happens faster in long haul applications than in metro applications. This first adoption in long haul also occurred with 40 Gbps and 100 Gbps. The combined revenue derived from shipments of 40 Gbps and 100 Gbps wavelength now drives approximately 80% of the DWDM Long Haul revenue. In 2013, as the demand for 100 Gbps ramped upwards and 40 Gbps demand started to wane, the revenue contribution from 100 Gbps surpassed that of 40 Gbps. We view this trend to continue.
The WDM Metro adoption is at an early stage. In WDM Metro, 40 Gbps demand is stable at approximately 20% share of the market, while 100 Gbps demand is growing. However, for 100 Gbps demand to accelerate and comprise a larger share of the WDM Metro market, the price points of 100 Gbps transponder cards will need to decline further. As we learned at OFC, we think this will happen later this year as optical component companies release 100G pluggable CFP and CFP2 modules.
We are looking forward to see what OFC has in store for us next year in Los Angeles!