From electrical communication to optical communication, the construction of 5G and data centers depends on the development of optical communication technology
With the rapid development of information technology, the global demand for data continues to grow, and higher requirements for communication technology, and the traditional communication method of signal transmission through cable, because of its large transmission loss, high power consumption, short distance, small amount of data, bandwidth limitation and other problems, can not adapt to the current data transmission needs, optical signal as the carrier, optical fiber as the transmission medium of optical communication technology is rising. At present, it has been widely used in gigabit fiber to the home, 5G communication network, data center and other fields.
Different from the traditional cable (mainly copper medium) transmission, the transmission of light through the fiber medium requires the conversion of photoelectric signals: first, at the transmitting end, the electrical signal is converted into an optical signal through the laser chip; It is then transmitted to the receiving end through the optical fiber; Finally, at the receiving end, the optical signal is reduced to an electrical signal through the detector chip. Among them, the laser chip and the detector chip are collectively called optical chips, which are one of the core components of optical communication, and their performance directly determines the transmission efficiency of optical communication systems.
Laser chips: there are four main types: VCSEL, FP, DFB and EML:
Detector chip: There are two main types: PIN and APD:
In the materials of optical chips, indium phosphide (InP) and gallium arsenide (GaAs), which are suitable for high-frequency communication, are mainly selected. Among them, indium phosphide has more applications, mainly used in telecommunications, data centers and other medium and long-distance transmission, and gallium arsenide is mainly used in short-distance transmission.
Three application scenarios and mainstream rates of optical communication
Optical communication industry chain
The mainland's 14th Five-Year Plan for the Development of the Information and Communications Industry requires the comprehensive deployment of a new generation of communication network infrastructure and puts forward the following construction goals:
(1) Gigabit fiber to the home application scenario
At present, the global operator backbone network and metro network (divided into core layer, aggregation layer, and access layer) have achieved optical fiberization, and the access network (that is, the "last mile" connecting the user end) in some regions has gradually evolved to optical fiber, and the mainland is the main promoter of FTTx optical fiber access (where x represents a single household, multi-family house or building, etc.; When x represents a single home, that is, fiber-to-the-home), major operators are actively replacing the traditional copper network with a fiber network. In 2020, mainland optical fiber access users accounted for the second largest proportion in the world, second only to Singapore.
The mainstream technology of access network FTTx adopts PON (passive optical network) technology, which has large transmission capacity, low cost and simple maintenance, which is a very cost-effective way. PON technology mainly includes EPON (using 1.25G optical chips), GPON (using 2.5G optical chips) and 10G-PON, etc., the current domestic optical fiber into the home into the window period from 2.5G to 10G-PON upgrade and replacement, the number of mainland 10G-PON ports in 2020 is 3.2 million, and it is expected to reach 12 million by 2025. From the perspective of the industry as a whole, the future will continue to develop towards higher speed 25G/50G-PON technology.
According to LightCounting, the global FTTx optical module market shipped about 62.89 million units in 2020, with a market size of $473 million, and is expected to reach 92.08 million and $631 million respectively in 2025.
(2) 5G communication network application scenarios
The world is accelerating the construction process of 5G, and the mainland is at the forefront of the world. 5G can provide higher transmission rates and lower latency, and its requirements for the speed of optical modules are also higher. 5G can be roughly divided into fronthaul, midhaul, and backhaul, and the rate of the corresponding optical module is roughly as follows: the fronthaul optical module needs to reach 25G, and the backhaul optical module needs to reach 50G/100G/200G/400G, which will drive the development of 25G or even higher rate optical chips.
According to LightCounting, the global telecom side optical module market fronthaul, (medium) backhaul and WDM markets reached $821 million, $261 million and $1.084 billion, respectively, in 2020, and are expected to reach $588 million, $248 million and $2.518 billion, respectively, by 2025.
(3) Data center application scenarios
The popularity of the global Internet and cloud computing has promoted the rapid development of data centers, and its data traffic has grown rapidly, including data processing within and between data centers, and optical communication has greatly improved its computing capacity and data exchange capabilities.
Compared with optical fiber to the home and 5G communication application scenarios, data centers have the highest transmission rate requirements for optical modules, and the demand for technology updates is also faster, with an average upgrade in 3 years, and the value of corresponding products is also the highest, which is currently the largest application market for optical modules, and will also dominate the growth of the optical module industry in the future.
The earliest use of 100G optical modules in the data center, in recent years began to 200G/400G optical modules large-scale promotion, the progress of foreign cloud manufacturers earlier than the domestic upgrade, from this year, 800G optical module demand will be further improved.
According to LightCounting, the global data center optical module market size was $3.504 billion in 2019 and will grow to $7.333 billion in 2025, with an average annual compound growth rate of 13.09%.
Multiple factors promote the localization process of optical chips
The mainland optical chip industry started relatively late compared with enterprises in the United States, Japan and other countries, and there is a certain gap in the accumulation of optical chip technology, production process accumulation, etc., especially in the field of high-end optical chips, the mainland relies on imports. Foreign companies in the whole industry chain of the optical chip industry have the ability to cover all from optical chips, optical transceiver components to optical modules, as well as higher brand awareness, and have established high industry barriers.
In recent years, with the changes in the external competitive environment, the uncertainty of the import of mainland optical chips, especially high-end optical chips, has been aggravated, which will further promote the pace of localization and substitution of the industry and drive the autonomous process of the mainland optical chip industry.
At the same time, the global optical module market share occupied by mainland optical module manufacturers is increasing year by year, including Zhongji Xuchuang, Huawei, Hisense Broadband, Guangxun Technology, Xinyisheng, Huagong Zhengyuan, etc. into the world's top ten optical module manufacturers ranking. The downstream direct customers of optical chips are optical module manufacturers, which will also be conducive to the localization of mainland optical chips.
Localization rate and competitive landscape of optical chips
According to LightCounting, the global optical chip market size in 2021 will be 14.67 billion yuan, of which the market size of optical chips of 2.5G, 10G, 25G and above is 1.167 billion yuan, 2.748 billion yuan and 10.755 billion yuan, respectively.
The technological development of optical chips of 2.5G and below, 10G, 25G and above in mainland China varies greatly, and the specific conditions of accounting for the global market size are as follows:
(1) 2.5G and below optical chip
2.5G optical chip is mainly used in the optical fiber access market, the product technology is mature, the mainland optical chip enterprises have basically mastered its core technology, foreign optical chip manufacturers have basically withdrawn from the market due to cost competition and other factors.
According to ICC forecasts, domestic optical chips of 2.5G and below will account for more than 90% of the global market share in 2021, and domestic representative enterprises include Wuhan Minxin, Zhongke Optical Core (Quanzhou), Guanglong Technology (Guilin), Guanganlun (Wuhan), Shijia Electronics (Henan), Yuanjie Technology (Shaanxi), CLP 13 (Hebei) and so on.
(2) 10G optical chip
10G optical chips are used in the optical fiber access market, mobile communication network market (mainly 4G) and data center market (40G optical modules were used in China in the early days). Mainland enterprises have basically mastered the core technology of 10G optical chips, and domestic production will account for about 60% of the global proportion in 2021, but some models of products, such as 10G VCSEL/EML laser chips, have a localization rate of less than 40% due to high product performance requirements and greater difficulty. Domestic representative enterprises include Huawei, Hisense Broadband (Qingdao), Yuanjie Technology, Yunling Optoelectronics (Wuhan), CLP 13, Zhongke Optic, Wuhan Minxin, Guangxun Technology (Wuhan), etc. Leading foreign companies are represented by Broadcom (USA), Sumitomo Electric (Japan), Mitsubishi Electric (Japan) and so on.
(3) 25G and above optical chips
25G and above optical chips include 25G, 50G, 100G optical chips, mainly used in the mobile communication network market and data center market. Mainland optical chip manufacturers have made breakthroughs in 5G fronthaul and 25G DFB laser chips in data centers, and according to ICC statistics, the localization rate of 25G optical chips in 2021 will be about 20%; The localization rate of optical chips above 25G is about 5%, and overseas optical chip manufacturers are still the mainstay. Overseas mainly include Mitsubishi Electric (Japan), Sumitomo Electric (Japan), Longmeitong (USA), Macomb (USA), etc.
At the same time, unlike other chip products, domestic enterprises give priority to the Fabless model and quickly enter the market through asset-light operations, while the mainstream direction of the optical chip industry is to adopt the IDM model. Compared with logic chips, which focus on pursuing higher processes and smaller sizes, optical chips pay more attention to the maturity and stability of the process, and realize characteristic functions through process improvement, which is the best production method for mainland enterprises to solve the bottleneck of high-end optical chip technology and mass production.
In the future, with the upgrading of technology and products, the application market of optical chips will further expand from the communication field to medical, consumer electronics, and automotive fields, such as face recognition, smart wearable devices, automotive lidar and other product applications, the industry will usher in a broader market space. At the same time, higher requirements are also put forward for the performance of optical chip products, and its technical development will develop from traditional multi-channel solutions to a new generation of silicon photonics technology solutions, and from existing discrete device chip solutions to more integrated optical chip solutions, so as to better fit and meet the needs of higher speed and longer distance scenarios. These will bring more market opportunities and more challenges to domestic manufacturers.