The market for active optical cables (AOCs) for the data center will produce $1.5 billion in revenues by 2019, according to the latest report from Communications Industry Researchers (CIR).
The report “Active Optical Cable Markets – Data Center Applications,” is part of a two-volume set. CIR has also recently published an analysis and forecast of the market for AOCs for applications in personal computing, fiber optic tools consumer electronics and digital signage.
Mobile broadband and video applications are flooding data centers with content and this creates a growing incentive to shift to fiber in at least part of the data center, according to CIR. It is becoming increasingly difficult for data center managers to avoid fiber optics in these increasingly high-bandwidth scenarios; fiber optic cleaning kit AOCs offer an excellent entry point for fiber optics to all but the most structured-cabling savvy network managers, the market research firm says.
The market is well established and Chinese AOC suppliers are getting in on the act. neoclean They can now compete with the best US, European, and Japanese AOC suppliers, says CIR; they are able to supply 40-Gbps cables with ease and a few are offering 100-Gbps AOCs.
The Chinese AOC challenge will require a strategic response from established AOC firms, CIR warns. This could take the form of better branding, improved supply chains or upgraded products. For example, the TE Connectivity (NYSE: TEL) line was upgraded in 2011 with 40-Gbps products that offered reduced power consumption and lighter-weight cables, and CIR expects other leading AOC firms to react.
“We also expect to see more activity in AOCs that use the highest-performance modules,” said CIR in a press release. “Such AOCs are not easy to make and this presents barriers to entry into the data center markets for smaller, less able AOC firms, providing market protection for the largest suppliers. The markets for such high-end AOCs are also not inconsiderable.”
CFP and CDFP together are expected to generate $190 million in revenues by 2019, the analyst says. fiber optic microscope Indeed, he believes that the proverbial “next big thing” in the AOC space will be CDFP AOCs and expect to see such products prominently displayed at the OFC, ECOC and SC trade shows in 2015. For now, the three companies to watch in this space are Finisar Corp. (NASDAQ: FNSR), Molex Inc. (NASDAQ:MOLX), and TE Connectivity, all of which have already introduced CDFP AOCs.
Nonetheless, throughout the period considered in this report, the “workhorse” QSFP and CXP AOCs will be the biggest revenue earners, with combined sales of $1.3 billion in 2019. These MSAs support both the Ethernet and Infiniband protocols that are core to any data center and at data rates that are likely to be the ones most used in data centers over the next decade. The earliest QSFP AOCs catered to the 10-Gbps market, but the QSFP AOC business is now centered around the 40-Gbps opportunity. CXP can support 100 Gigabit Ethernet or three 40-Gigabit Ethernet channels. Ideal 45-163 At this point almost every firm offering a range of AOCs includes CXP options, the firm says.
CIR’s report identifies and quantifies opportunities for selling AOCs for the data center (including Ethernet, InfiniBand, Fibre Channel, and SAS), and provides detailed nine-year forecasts of data center AOC markets, with breakouts by end-user application, interface standard, cable lengths, type of cable and wavelength. Forecasts are provided in units shipped and revenue terms. The new CIR study also assesses the product/market strategies of the leading AOC suppliers.