Report outlines promise of 40Gbit/s networking

Telecommunications equipment manufacturers will purchase approximately US $500 million worth of 40Gbit/s transponders and components by 2012, according to new market research.

Telecommunications equipment manufacturers will purchase approximately US $500 million worth of 40Gbit/s transponders and components by 2012, according to a new report from CIR, a market research and industry analysis firm.

The report is one of a series that examines market developments in optical networking modules and components.

Having run the gamut from over-hyped "next big thing" to "dead and buried", 40Gbit/s has once again emerged as a topic of conversation in the market.

The difference today is that real deployments are beginning to happen and advances in technology and the availability of 40Gbit/s transponders have made the technology into something worth considering.

According to CIR's newest report, the market currently resides at the VSR (2 km) level with deployments mainly limited to core routers.

Although there have been announcements by some carriers including AT and T, Sprint and Softbank of plans to upgrade backbone networks to 40Gbit/s, CIR believes that industry wide 40Gbit/s rollouts won't ramp up until 2010.

Whether or not 40Gbit/s achieves the market prominence of today's 10Gbit/s remains to be seen but at a minimum it won't happen until at least 2015.

Nonetheless, 40Gbit/s will find sizeable markets much earlier than that and CIR expects that the escalation in the 40Gbit/s market will be driven by new technology enablers and cost improvements in addition to meeting bandwidth demands.

The most important recent innovation has been the emergence of advanced optical modulation schemes and improved dispersion compensation, both of which make 40Gbit/s transmission over existing networks a much more practical proposition.

40Gbit/s also offers operational advantages inherent in the technology in that most network engineers believe that routers work at a much higher rate of efficiency if bit streams remain intact rather than carried as several lower-rate channels.

And 40Gbit/s SONET provides this capability in a way that say Ethernet cannot match.

So far, many of the large component and module manufacturers such as JDSU, Avanex, Finisar and Bookham have not entered the market but CIR expects that will change as volumes for 40Gbit/s ports rise into the tens of thousands.

Modules and components firms are extremely affordable and it would not take much to acquire some of the smaller firms.

Firms like Apogee, CoreOptics, Inphi, Kailight, Picometrix or Teraxion could be absorbed in the next two to three years.

CIR's new report, "The Transition to 40Gbit/s" provides a thorough assessment and forecast of 40Gbit/s technologies and market opportunities through 2012.

The report examines the 40Gbit/s value chain and projects how and where 40Gbit/s will emerge.

Technology areas covered include transponders and emerging MSAs, lasers and modulators, photo detection, dispersion compensation and amplification.

Included are detailed forecasts of 40Gbit/s ports, transponders and components for line cards as well as profiles of some of the leading manufacturers operating in this space.

Firms mentioned in this report include Apogee, Avanex, Bookham, CoreOptics, CyOptics, Hitachi Cable, JDS Uniphase, Finisar, Fujitsu Component, Inphi, Kailight, NEC, NEL, Opnext, Oki, Picometrix, u2t Photonics and Yokogawa.

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