Optical communication, that is, a communication method that uses light as a carrier for information transmission. Compared with traditional copper cable communication, optical communication has obvious advantages in terms of bandwidth, speed, anti-interference, anti-corrosion, volume and weight. With the continuous maturity of optical communication technology and the gradual reduction of overall cost, “optical into copper” has become the main trend of the communication industry in recent years, and optical communication has been widely used in the telecom market and data centers.
Simplified, the optical communication system consists of two parts: optical communication equipment and transmission optical fiber. The optical fiber is the transmission path of light, and the optical module is generally configured in the optical communication equipment.
The optical module is usually packaged by components such as TOSA (Transmitter Optical Subassembly) / ROSA (Receiver Optical Subassembly) / BOSA (Bidirectional Receiver Optical Subassembly, integrated optical transceiver module), the internal chip includes optical Chips, electric chips, etc. The functions of each component are as follows:
At the transmitting end, the TOSA (optical transmitting sub-module) of the optical module includes CDR (Clock Data Recovery, clock and data recovery), LD (Laser Driver, laser driver), laser chip, combiner and other devices. The transmission principle of the transmitting end is as follows: 1) First, the digital signal completes clock and data recovery through CDR to ensure correct data sampling; 2) LD (laser driver) drives and excites the Laser (laser chip) to emit The laser carrying the signal; 3) The combiner aggregates multiple lights into one to achieve a faster transmission rate and input the signal to the optical fiber.
At the receiving end, the ROSA (optical receiving sub-module) of the optical module includes splitters, photodetectors, TIA (Trans-Impedance Amplifier, transimpedance amplifier), CDR and other components. The transmission principle of the receiving end is as follows: 1) First, the optical signal in the optical fiber is divided into multiple channels through the splitter; 2) The photodetector receives the optical signal and converts it into an electrical signal; 3) The TIA amplifier amplifies the electrical signal for subsequent processing; 4) CDR completes the recovery of clock and data, and transmits to optical communication equipment.
Optical Communication Industry Chain
Optical communication can be divided into four links in the industrial chain: the production of core components such as optical chips/electrical chips, optical device packaging, optical module packaging and optical communication equipment production.
Production of core components: mainly including optical chips and electrical chips. Among them, the optical chip is the core of photoelectric conversion inside the optical module, and the electrical chip is the core component of the electrical signal processing and modulation inside the optical module.
Optical device packaging: optical chips, electrical chips and other components are packaged to form optical devices, which can be divided into active devices and passive devices according to whether photoelectric signal conversion is required. Optical devices are transitional products of optical chips and optical modules.
Optical module packaging: Encapsulating various optical devices and other components into optical modules is the core of photoelectric conversion in optical communications. The products are in the stage of rapid iterative upgrading, and domestic manufacturers have cost and process advantages.
Production of optical communication equipment: Integrating optical modules into optical communication equipment and directly shipping to end customers has the advantage of capital monopoly. At present, mainstream domestic manufacturers such as Huawei, ZTE, and FiberHome already have global advantages.
3 terminal requirements
The telecom market and data center market are the main downstream markets of optical communications. In recent years, with the emergence of 4K/8K display screens, applications such as HDMI fiber optic cables have also begun to enter the market.
Telecom market: 5G construction has entered a hot period, and the fronthaul has been fully upgraded to 25G
Optical communication is mainly used in the transmission bearer network, fixed network access network and wireless access network in the telecom market. In the 5G era, in order to realize functions such as flexible scheduling and network protection, as well as convenient performance guarantees such as large bandwidth and low latency, the communication network architecture has evolved from two levels to three levels, adding new requirements for mid-haul optical modules, and front-haul and back-haul The demand for the speed of optical transmission modules has been upgraded. Therefore, the demand for the number of optical modules in 5G construction has increased sharply, and the optical communication chips have been upgraded from 10G to 25G. From 2019 to 2023, the construction scale of 5G macro base stations of my country’s three major operators will reach 4 million stations, which will drive a significant increase in the demand for telecom optical modules, and the demand for 25G series chips will also surge.
Data Center Market: Traffic Explosively Increases, Demand for Iterative Optical Module Products Continues to Exist
In the data center market, optical communication is mainly used in the interconnection between servers and switches, switches and switches in the data center. With the trend of large-scale data centers and the flattening of internal architecture, data center optical modules complete an iterative product update every 3 to 4 years on average. In 2019, data center leaders such as Amazon and Google have entered the deployment of 400G datacom (requiring 25G/50G optical chips). As the demand for data centers continues to grow, data centers are expected to become the largest terminal demand in the optical communication industry.
Consumer electronics market: The demand for large bandwidth transmission is emerging, and optical communication technology can solve the transmission bottleneck
In the consumer electronics market, with the continuous development of applications such as smart homes, smart cars, and AR/VR, the bottlenecks of traditional copper wire transmission methods in terms of bandwidth, delay, and transmission distance have become increasingly apparent. Using light waves as a carrier to transmit signals can ensure data High quality transmission. HDMI fiber optic cables and others have gradually entered the market.
4 Market Size and Competition Landscape
According to Yole’s latest research forecast, the global optical module market will grow from US$7.7 billion in 2019 to US$17.7 billion in 2025, with a compound annual growth rate of 15%. Among them, the size of the telecom market will grow from US$3.7 billion to US$5.6 billion at a compound growth rate of 7%, and the datacom market will grow from US$4 billion to US$12.1 billion at a compound growth rate of 20%. The proportion of digital communication optical modules will further increase.
Optical chips: technical barriers are high, and domestic breakthroughs are urgently needed
Optical chips are the core of photoelectric conversion in optical modules. The global market size is about 600-700 million US dollars. It is expected that in the next 3-5 years, with the acceleration of data center construction and 5G construction entering a hot period, the compound growth rate of market size will exceed 10% .
Optical chips can be divided into VCSEL (Vertical Cavity Surface Emitting Laser, Vertical Cavity Surface Emitting Laser), DFB (Distribute Feedback Laser, Distributed Feedback Laser) and EML (Electroabsorption Modulated Laser, Electroabsorption Modulated Laser). The corresponding market size and major suppliers are as follows:
At present, the localization of 10G optical chips is basically realized, and the market of 25G and above high-speed optical chips is mainly occupied by foreign manufacturers, and the localization rate is extremely low. In recent years, domestic manufacturers such as Sanan Optoelectronics, Changrui Optoelectronics, and Shaanxi Yuanjie have begun to enter the market, and are expected to realize the localization of high-speed optical chips in recent years.
Electronic chips: monopolized by overseas giants, domestic companies are in their infancy
The electrical chip can adjust the electrical signal to work with the optical chip; it can also perform complex digital signal processing, such as modulation, coherent signal control, serial-parallel/parallel-serial conversion, etc. At present, most electronic chips are integrated chips, and there are also a small number of discrete solutions on sale.
With the continuous increase of data volume and the update of equipment stock, while the demand for optical modules has increased sharply, the market size of electronic chips has also increased. It is estimated that the market growth rate of electronic chips will exceed 5% in the next five years. The annual global market size is about 300-400 million US dollars.
In the field of optical module electrical chips, the domestic supply of 10G and below electrical chips is mature, and the main suppliers include Xiamen Youxun and Nantong Feion. 25G and above power chips mostly rely on imports. American companies such as Macom and Semtech have mature technologies. Domestic manufacturers have a 1-2 generation technology gap with foreign countries in the field of high-speed TIA, CDR and DSP products; goods.
Optical modules: domestic manufacturers have cost and process advantages, and their market share continues to increase
At present, in the optical module market, the market share of domestic manufacturers is gradually increasing. According to Ovum data, in 2019, in terms of optical transceiver modules, Zhongji InnoLight, Accelink Technology, and Hisense Broadband ranked second, fourth, and sixth in the world respectively bit.
On the whole, in the production process of optical modules, domestic enterprises represented by Zhongji InnoLight have strong advantages in cost and packaging technology, occupying 60-80% of the global market share. Domestic optical module manufacturers have a strong demand for localization of high-speed optical chips.
5 future trends
Upstream optical chips and electrical chip technology breakthroughs are the main development direction. From the perspective of the industry chain as a whole, upstream optical chips and electrical chips of optical communication are located at the core of the optical communication industry chain, with high technical barriers and high product value. Although Chinese manufacturers have gradually increased their overall market share in the optical communication market, they mainly focus on optical module packaging, and there is a big gap between the upstream core component optical/electrical chip field and the international level. Chinese enterprises have a certain amount of optical/electrical chip mass production. ability.