Latest Developments in AOC and 10GBASE-T Markets

LightCounting Analysis:  As with every startup that creates new technology, ultimately it’s the scale and cost of international distribution that is the most expensive, most time consuming to create and the weakest part. The acquisition enables Luxtera to supply key silicon photonics components to Molex and leverage Molex’s international distribution. Additionally, it allows Luxtera to commercial its silicon photonics technologies for other markets as well. Molex is a leading connector supplier and has been trying to diversify its business beyond this into cabling. Molex had been toying with the AOC business with a product from Furukawa/Fitel based on a 1060nm InGaAs VCSEL first demonstrated since the supercomputing show at SC’09. 

The acquisition of Zarlink’s AOC business by Tyco and MergeOptics’s AOC and transceiver business by FCI positioned these companies as full line suppliers of copper, Direct Attach, optical transceivers and AOCs.  Hitachi Cable also has AOC and copper Direct Attach product lines. Luxtera AOC resellers Amphenol and Siemon will now have to OEM cables from one of their competitors – Molex! This acquisition will give Luxtera some much needed cash as the business of raising venture capital is difficult.  As they say, VC have deep pockets but short arms! This frees up Luxtera to focus on developing and commercializing its silicon photonics technologies for other markets.

Light Peak Goes To The Dark Side! Intel decided to first introduce Light Peak in a “copper version” and an optical version later. No launch date set yet.  Intel sees 10G Light Peak “alongside of 5G USB 3.0” although consumers may not see it that way. Intel’s Light Peak is still in product development.  Light Peak is a 10G optical product designed to converge all the various PC I/Os such as VGA, HDMI, USB, DisplayPort, FireWire, Ethernet etc. and for Ethernet server interconnects. Intel announced the all the “parts” are available from various suppliers for production –but no formal product launch.  (We were hoping for a CES launch - but no joy).

LightCounting Analysis: One of the key issues is USB has electrical power enough to power a scanner, printer, cellphone, camera  whereas Light Peak does not have power.  Adding copper power rails next to optical fiber in the cable is complicated. Many rumors have been circulating about the adoption by Apple for its PC but nothing formal has been announced yet.  Fresh rumors emerged claiming Apple will introduce new models of the  MacBook Pro notebooks equipped with Light Peak interconnects in 2011, perhaps in April.

For transceiver and AOC suppliers, Light Peak is something to watch closely as it has potentially disruptive effect in the commercial datacom interconnect space – especially interconnecting servers to switches.   If Light Peak is integrated onto server motherboards at very low cost, it could disrupt the SFP+ and Direct Attach copper transceiver/AOC business as well as impact the 10GBase-T business.  The consumer space is just now ramping up with USB 3.0 and trying to figure out how to make use of 5G.  10G at this time is overkill.  However, in the server space 10G is desperately needed to support the new Intel Sandy Bridge processors and new PCI Express 3.0 running at 8G per lane.  What happens with 10G Light Peak in the server competing against 10GBase-T in the server will be interesting to see how this plays out.