According to the latest forecast by LightCounting (LC), despite the diversification of AOC (active optical cable) products, from 2020 to 2024, nearly two-thirds of AOC shipments will come from two products–1*10G and 1*25G.

In the latest forecast, LC has reduced its AOC shipments in 2023, which is 43% lower than the forecast at the end of 2018. This is mainly due to the expected reduction in demand for 1*N products by China’s hyperscale data center operators. However, from the perspective of revenue scale, as the new 400G (8*50G) AOC will be widely used in high-performance computers (HPC), cloud and core routing, LC raised its forecast for AOC revenue in 2023 by 20%.

While the demand for 100G products in HPC and data centers is rapidly rising, starting in 2019, HPC has begun to move quickly to the next speed-200G. In the case of full allocation, one forthcoming supercomputer will consume 243,000 100G AOCs. LC said that although the demand for 100G AOC in cloud applications has finally ushered in growth, the analysis company believes that the opportunity for 200GbE AOC in Ethernet will not be too great.

The unique characteristics of HPC clusters are very suitable for AOC. InfiniBand clusters are mainly built using AOC. The HPC market is evolving with double data rate cycles and faster adoption. Mellanox InfiniBand HDR for 200G started late, but its adoption has been faster than previous rates since mid-2019.

Core router manufacturers use a “buy on demand” approach between multiple chassis, so using AOC on a switch fabric board is better than using embedded optical modules (EOM). At present, the core router manufacturers have finally switched from 12*10G CXP AOC to 12*25G CXP AOC. At the same time, the new core router with a split chassis is using a 100 / 400G AOC to connect the white box. AT&T even submitted its own designed white box to the Open Compute Project, and expected it to be widely used in the network.

In the top 500 machines, the use of proprietary EOM interconnects has decreased, and they have instead supported cluster systems interconnected with Ethernet, InfiniBand, or Omni-Path architectures. These machines use AOC and DAC. A new supercomputer developed by Fujitsu uses 12*25G EOM, but its subsequent products will use 100G AOC. The new Cray supercomputer with a proprietary Slingshot interconnect will use a 2*200G AOC optical link.

In the late 1990s, optical interconnects such as optical cross-connects were used in racks for multi-chassis systems in telecommunications equipment. These systems were later converted into a single rack. However, at this stage, a new generation of multi-chassis systems has emerged to handle the increasing bandwidth in optical transmission. Although four or five OEMs are planning or considering using EOM between chassis, LC believes that its demand will not be very large.

EOM also includes high-value and long-standing opportunities in military, aerospace and industrial applications. As optical devices overwhelm the cost advantage of copper in terms of performance, size, weight and power, especially in the military/aerospace field, the growth of EOM will accelerate in the future. So far, although EOM is mainly targeted at some niche applications, there are hundreds of categories of these applications, and it is also a key driver of demand growth for this product over the forecast period. Embedded computing will be the main driving force, but the airborne platform from drone to F-35 is a good application opportunity for military-specific EOM in the near future, and commercial aircraft and many other applications will bring good growth to EOM at the end of the forecast period.