The entire market for fiber-optic cable, components, and chips peaked in 2000 and is now trying to correct itself. Over the past three years, the general economic downturn saw the decline of telecommunications carriers, hammering the market for long-haul fiber-optical networks using Sonet/SDH and DWDM transport and switching technologies. Combine the fact that over 50% of the optical marketplace is telecommunications with the lack of any significant new buying, and it's easy to see why many optical companies simply closed shop.
That said, many optical component and semiconductor manufacturers are still cranking out innovative new products for the fiber-optical marketplace. With the market in its "corrective" mode, the survivors are positioning themselves with great new leapfrog products that will bring them a fast return when business comes back.
One fiber-optic market showing promise is metro networks. Sonet/SDH dominates this sector but is being challenged by Ethernet. During the dot-com boom, long-haul and metro networks were overbuilt, and there's still an enormous amount of dark fiber. Some metro networks are being built, although the emphasis is on lower costs and equipment that's easier to provision. Ten Gigabit Ethernet (10GE) just may capture this segment.
Sonet/SDH was originally optimized for voice, although today data is equal to, or even exceeds, voice on some networks. Its fixed time-division multiplexing (TDM) nature makes it inefficient because of the difficulty in scaling and adapting to the nature of bursty data traffic. Considerable effort is under way on a number of fronts to make optical Ethernet a service-bearing technology like Sonet/SDH. Some of the architectural alternatives include Ethernet over Sonet (EoS), Switched Ethernet over Fiber, and Ethernet over WDM (wavelength-division multiplexing). For more information, contact the Metro Ethernet Forum (MEF).
Growth in Ethernet local-area networks (LANs) continues, but with the newer optical versions lagging. Optical options exist in both 1GE and 10GE. The copper CAT5 and CAT6 versions of 1GE have all but won this segment. So why rewire with fiber if plain-old existing unshielded twisted pair works just fine? Most of the newer PCs and laptops have a 10/100/1000-Mbit/s RJ-45 port, and 1GE switches are growing in number in enterprise networks.
More activity is expected in the 10GE optical space as business recovers with investment in 10GE optical LAN backbones. Lots of equipment and components for this market are now available, and competition is heating up. Thus, the outlook looks strong for optical transceiver modules, switches, and routers in this market.
Another sector showing growth right now is storage area networks (SANs). This may be the fastest growing segment for fiber as more companies install Fibre Channel and iSCSI fiber connections to their servers.
For the future, fiber to the home (FTTH) seems to have the most potential. Unless the traditional carriers get off their duffs, the cable companies are going to steal the broadband market from them. While DSL has shown some growth, it's just a stopgap that will ultimately have to yield to fiber. That's because DSL over the plain-old telephone-service local loop can't hack the higher speeds required by movies-on-demand, gaming, and other multimedia services. Some of the smaller independent carriers already install passive optical networks (PONs) in the last mile. However, this enormous segment won't go anywhere until the main carriers decide to do it on their own, or unless they're directly and immediately threatened by the cable companies.
Have we hit the optical nadir? Not yet, according to most market research firms and experts in this field. A leading market research company, iSuppli, projects that a modest turnaround should begin in 2004, with growth continuing through 2007. Sales won't even come close to 2000 levels for many years, but at least the trend shows an upward tick. Chris Emslie of Fibrecore Limited, a maker of specialty fiber in the U.K., indicates that the turnaround may not actually start until 2005. Others predict it could take even longer. Most agree, though, that at this point the only way to go is up.
HOT OPTICAL PRODUCTS
Even with the downtrodden manufacturers hunkering down and enduring the consolidation, they haven't sat still. Existing products have been fine-tuned, and some innovative new products have emerged. This is especially true in the semiconductor sector, where major manufacturers were able to hold on to their optical businesses thanks to larger markets for other component types. Here's a summary of some of the standout new products that are looking for customers.
Maxim Integrated Products' MAX3737 is a multirate laser driver with extinction ratio control for application in Ethernet and Fibre Channel transceiver modules. This device can drive laser diodes at speeds from 155 Mbits/s (OC-3) to 2.7 Gbits/s (OC-48). It may be ac- or dc-coupled to the diode.
The MAX3737 includes automatic power control (APC), extinction ratio control features, and on-chip thermal compensation. It meets all of the SFF-8472 standard timing and diagnostic requirements for SFP modules with digital diagnostics.
Some key specifications include a programmable bias current range from 1 to 100 mA. The modulation current can also be programmed from 5 to 60 mA when dc-coupled and up to 85 mA when ac-coupled. The circuit consumes only 155 mW.
A newer device is the MAX3942 modulator driver. It's designed for Sonet/SDH OC-192 or STM-64 10-Gbit/s systems, as well as 10GE systems for the metro, long-haul, point-to-point, and dense-wavelength-division multiplexing (DWDM) applications. It can drive a Mach-Zehnder modulator or a direct modulated laser. The device operates from a single +5- or −5.2-V supply and consumes only 125 mA. The MAX3942 has an edge speed of 23 ps and a programmable modulation current up to 120 mA.