With the development of the optical communication industry and the improvement of the technology, the demand for bandwidth is increasing, the communication equipment manufacturers and operators will increase their investment in the optical communication network and equipment, thus driving the development of the optical module industry.

The global optical module market keeps a steady growth. According to Ovum’s market share report, the communications market share is expected to grow in 2021. The global market for optical communications reached the US $10.1 billion in 2017 and has been growing rapidly. The market is expected to reach the US $16.6 billion by 2020, with a projected compound growth rate of 18 percent over the next three years.

The development of optical communication technology cannot be separated from the milestone breakthrough of optoelectronic device technology.

In the 1970s, the emergence of the semiconductor laser and low loss optical fiber unlock the doors of optical fiber communication.

In the 1980s, DFB laser technology.

In the 1990s, Erbium-Doped Fiber Amplifier (EDFA) technology.

In the 2000s, the DWDM technology.

In the 2010s, coherent communication technologies are driving the optical communication system at a rate of 1,000 times per decade in terms of transmission capacity.

How will the optical module industry develop in the future? What are the trends?

In the next three years, the development of optical module technology industry will show the high speed, integration, large bandwidth, small size, and low power consumption.

In different application areas, optical modules will be considered both performance and cost of ways to enhance the rate and capacity.

At present, 100G DP-QPSK technology has been mature and become the mainstream of transmission network, and the new technology and application not only focus on trunk lines but also gradually sink and extend to Metropolitan Area Network. Metropolitan area networks and data centers will be the fastest growing segment of the market over the next few years.

Above 100G, the 400G and 1T technology has developed steadily. The coding series and the bit rate have been improved further, the modulation code type has been diversified such as the original DP-QPSK, DP-8QAM and DP-16QAM, DP-32QAM and also have DP-64QAM.

At present, the coexistence of multiple codes has not changed, there is no absolute advantage of transmission code.

With the explosive growth of bandwidth traffic, the speed of Ethernet interface has far exceeded the speed of physical bandwidth of optoelectronic devices PSM (Space Division Multiplexing), wavelength-division multiplexing (CWDM, LAN-WDM, 4WDM), and high-order modulation PAM4 are becoming the trend.

At present, the 100G optical module mainly adopts QSFP28 package. 400G optical transceiver package is the difficulty. The 100G optical module mainly focuses on OSFP and QSFP-DD two multi-source protocols.

The technology can be divided into GPON and EPON in the passive optical network field. With the increasing popularity of FTTX and the rise of high bandwidth applications such as 4K/8k video, VR/AR, users’demand for access bandwidth is increasing.

Unlike previous 3G and 4G mobile communications, 5G mobile communications technology is not only an upgrade but also a driving platform for the future digital world and the infrastructure for the development of the Internet of things, which will truly create a new fully connected world. In order to adapt to the large bandwidth, low delay, and mass connection services, new requirements are put forward in the aspects of bandwidth, capacity, delay and network flexibility of 5G bearer network. 5G bearer network architecture is divided into fronthaul, middle-haul and backhaul.

In the 5G transmission network, the line side bandwidth of the core layer and convergence layer is between 100G and 600G. The client interface for 5G access layer equipment needs 10G/25G, and the network interface bandwidth is larger than 25G. In the 5G middle-haul network, the transmission bandwidth is close to the requirement of the backhaul network. In the 5G fronthaul network, the bandwidth is less than 25G with the PRI interface.

In order to meet the market demand for low power consumption, low cost, high density, and high reliability, the academia, and industry have paid more attention to photonic integration, optoelectronic integration, and silicon-based photonic integration technology. The manufacturing cost of packaging and coupling can be reduced through integration, the suppliers of optoelectronic devices and modules, and the users of operators can reduce the operating cost of equipment power consumption, computer room occupied area, and system opening.

The industrialization of ultra-low loss and large effective area optical fiber, the academic research of multi-core and fiber-optic communication technology are all hot spots in recent years. The optical amplifiers, optical connectors, and optical backplanes are also being optimized around the optimization of fiber transmission performance in the field of optoelectronic devices.

The smaller size of optical device and module is helpful to reduce the size of the whole machine, increase the bandwidth density of the panel, reduce the area of the machine room and save the operation and maintenance cost. The same rate package becomes smaller, or the same package rate increases. At present, the 100G coherent optical module on the line side has evolved from the original 5″x 7″ fixed installation mode to 4″x 5″, further to CFP-DCO, CFP2-ACO packaging, and lower power consumption. The 400G coherent optical module may be packaged as CFP8-ACO, CFP2-DCO, OSFP or QSFP-DD. The QSFP-DD is the most compact. With the rapid development of the data communication industry chain, the client side packaging will be unified with the digital communication module, such as QSFP28 or 400G OSFP, QSFP-DD package.

With the increasing demand for information processing, the data flow carried by the network is increasing. Internet traffic is bound to increase the demand for bandwidth in optical networks.

The 5G era is coming soon, and it is expected that the 5G networks of various operators will enter the peak period of large-scale construction by 2022. Base station antenna is upgraded from 2 * 2 Mimo to 4 * 4 Mimo, which promotes the upgrade of base station optical module from 6G/10G to 10G/25G/50G. According to Lightcounting, the wireless forward market has grown since 2017, and demand for 25G optical transceiver modules has risen rapidly, reaching a $710 million market segment by 2022, with 10G and 25G  being the dominant rates. Gigalight 10G/25G optical modules for 5G fronthaul are available. Especially, Gigalight 25G optical modules adopt self-developed mini-TO and process optimization to reduce cost.

Overall, the global market for optical modules is the largest segment of the optoelectronic device market. According to Ovum’ forecast, the market will continue to grow rapidly and is expected to grow to $11 billion by 2022. The application of 25G optical module has gradually replaced the 10G optical module to become the mainstream. However, 10G will be the replaced option before the mature of 25G. The data center, wireless network, access network, and transmission network have formed the demand resultant force for 25G optical transceiver module, which will be the explosive force of the industry.