Member News - May 2014

Industry Member News

12 May, 2014

In this Issue:

What Net Neutrality Means to Photonics
Telecom policy is generally something that is over the job grade of the photonics industry - we just sell the hardware to whomever will buy it. But the recent U.S. FCC announcement on net neutrality is part of a bigger trend that merits pause. To the extent that it means anything, what exactly does it mean for optoelectronics suppliers?

In short, the content providers want the carriers to be utilities - net neutrality - keeping the cost of using their content low, maintaining low barriers to entry for startups, etc. The carriers don't want to be utilities - I'll call it not neutrality - they want to segment and rationalize their businesses. It's been framed in a way that presumes that the consumer would benefit by net neutrality, although given other changes going on, that's not at all clear. In fact, it's not clear what it means to anyone yet, but we can make the following observations.

First, changing market share and other churn in the market usually means fresh capital investment, and that can mean additional sales of optical equipment. This might be an inefficient use of resources and capital, but it's good for optics sales. For example, if everyone uses Google search today but switches to Microsoft Bing tomorrow, Google's data centers don't get sold and used by Microsoft. Instead, Google's data centers would sit underutilized while Microsoft would have to expand its data centers. And so on.
OIDA Advisory Board and Council
Claudio Mazzali,
Corning Incorporated

Mike Fiddy,
University of North Carolina

Steve Grubb,

Christoph Harder,
HHP and Swiss Photonics and Laser Network

Fred Leonberger,
EOvation Technologies, LLC

Elizabeth Rogan, The Optical Society
Second, changes to the status quo might shift profits from one market segment to another, benefitting some optics vendors over others. If the carriers can make more reasonable margins on their services, they can ease the pressure on equipment vendors, who can ease their pressure on optoelectronics components vendors. But at the same time, higher service costs to Google, Facebook, Netflix, and others could change their businesses just enough to stifle demand for new equipment, or at least increase the price pressure on data center equipment generally. Consequently, it may shift profit margin from one set of vendors to another.

Combined with other changes in the industry (the Aereo U.S. Supreme Court case, carriers moving into content, content providers moving into infrastructure and hardware, SDN and network virtualization), and it's even more complicated. It's not clear what will happen, but what's certain is that something will.

Recent Reports out of OIDA and Elsewhere
OIDA sent members several reports recently, and a common theme links all of them: integrated photonics. OIDA has been putting a large effort into this topic, but much of it is behind the scenes. Here are some highlights:
  • OIDA's April Market Update - reports on data center optics, and silicon photonics as a solution to challenges in data center optics. (It also reports on the passive optics market and trends covered at OFC.)
  • OIDA's Report on the NSF Foundry Meeting - summarized presentations and conclusions from a meeting last fall hosted by OIDA for NSF. A key takeaway: a U.S.-based silicon photonics foundry should use an established state-of-the-art fab, because only such a fab has the process control necessary to move the technology forward.
  • An Institute for Defense Analysis (IDA) report identified other gaps in the integrated photonics foundry ecosystem beyond the fab itself, including packaging, testing, and design tools. This is a point that OIDA has been pressing.
  • A long-awaited U.S. government report from the White House - (the "Fast-Track Action Committee" report) identified research access to integrated photonics fabrication as one of 7 key opportunities in optics and photonics that merit government action. This is an important follow-on to the 2012 National Academies study that was addressed to a larger community, and the 2013 National Photonics Initiative white paper that offered recommendations to the U.S. government from the photonics industry.
In May, OIDA is hosting its 3rd focus group meeting on integrated photonics manufacturing, which continues a series of events aimed at clarifying this complex topic, with an emphasis on the overall ecosystem (including packaging, test, and design tools, as well as fabrication).

OIDA also applied for a U.S. government AMTech grant to help resolve challenges in the integrated photonics ecosystem, with an announcement expected very soon.

OIDA will continue to hold events and publish reports, with the next workshop reviewing the state-of-the-art in commercial integrated photonics, to be held in Fall 2014.

100GbE Workshop - Finding Single-Wavelength Technology
OIDA is co-hosting a workshop to discuss the technology for 100GbE single-wavelength single-channel optical interfaces for data centers. Note that this is single-wavelength 100GbE, not just any flavor of 100GbE. OIDA is partnering with the Ethernet Alliance (EA) for the event, to be held on June 12-13 in San Jose.

The challenge to this technology is to find a path that's just right for everyone. Suppliers could invest too soon and waste precious R&D budgets. Or, suppliers could invest too late - or invest in the wrong approach - and miss the opportunity to competitors. The aim is to find the "Goldilocks" path - the one that is just right, and with the right timing.

The end users are ostensibly agnostic about specific technologies: they just want the equipment vendors and component suppliers to provide the best stuff at the lowest prices. But the end users are not the ones making the investment, yet they will be the ones picking winners and losers. For their part, the vendors have to anticipate the technology and the market without losing their shirts.

Note that this workshop is not a discussion about 100GbE standards. Standards efforts are ongoing and include multiple-channel options for 100GbE, such as parallel channel versions and multiple wavelength versions. The upcoming OIDA-EA workshop presumes that single-wavelength technology will someday be used as a part of some future standard (such as 400GbE) - as it has in the past - and considers that path by itself.

The workshop will be collocated with CLEO in San Jose, on June 12-13. For the agenda and registration, click here.

Federal Grant Opportunities
Department of Energy - Golden Field Office Department of Defense/DARPA Department of Defense/Air Force National Institute of Standards and Technology If you are interested in receiving additional information similar to this, please email

Optics & Photonics Committee Report Released
On April 17, the Fast-Track Action Committee on Optics and Photonics (FTAC-OP) released the report Building a Brighter Future with Optics and Photonics. The report includes seven recommendations split into two categories: research opportunities and capability opportunities.

The FTAC-OP, a subcommittee of the Committee on Science of the National Science and Technology Council, was formed to build off of the findings of the National Academy of Sciences' (NAS) report Optics & Photonics: Essential Technologies for Our Nation. The FTAC-OP Committee includes representatives from the U.S. Departments of Commerce, Energy, Defense, and Health and Human Services as well as the National Science Foundation, National Institute of Standards and Technology, National Aeronautics and Space Administration, and the White House Office of Science and Technology Policy.

Several of the concepts recommended in the report are supported by the National Photonics Initiative (NPI), which OIDA is a collaborator. To read the statement released by the NPI, visit the NPI website.

To read OSA CEO Elizabeth Rogan's statement, please see the news release.

OSA Executive Forum Presentations Now Available Online
More than 150 senior-level executives convened at OFC for the annual OSA Executive Forum to discuss key themes, opportunities, and challenges facing the next generation in optical networking and communications.

View the 2014 presentations to find out what industry leaders expect regarding business and technology developments. Save the Date for Executive Forum 2015, 23 March, Los Angeles, California, USA.

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