North America Pluggable Optics for Data Center Market
Adoption of Linear Pluggable Optics to Fuel North America Pluggable Optics for Data Center Market Growth
Linear pluggable optics (LPO) are optical transceivers that do not include digital signal processor (DSP) chips. They rely on simpler signal modulation techniques and basic electronic components. This results in lower power consumption and production costs compared to DSP-based solutions. This simplicity also results in lower latency, making LPOs suitable for high-speed environments. LPO modules are increasingly being used in modern data centers, and they are becoming essential components of co-packaged optics (CPO) and near-package optics (NPO) solutions. These applications benefit from direct, short connections between ICs and LPO optical modules, which maximize the efficiency gains provided by LPO technology:
Lower power consumption, reduced bill of material (BOM) components, and minimal latency features of LPOs are expected to fuel their demand in the coming years. In addition, mega data centers widely adopt LPO, and it works great for latency-sensitive applications in AI and ML and enhances network performance. To cater to this market, the market players are launching solutions, which contribute to the market growth. For example, in March 2023, Eoptolink Technology Inc., Ltd. (SZSE: 300502)—a leading provider of optical transceiver solutions and services—announced the launch of 800G LPO. The product was launched due to the measurable cost savings offered by LPO to the mega data center.
LPO significantly reduces power consumption for both the module and the system while maintaining a pluggable interface, providing the economics and flexibility customers require for high-volume deployments. The industry leaders are focused on the reduction of the network power consumption for AI and other high-performance applications. For that, they are taking some strategic decision that maximizes the adoption of LPO technology. In March 2024, the Linear Pluggable Optics Multi-Source Agreement (LPO MSA) was formed by a group of networking, semiconductor, and optics companies to develop specifications for networking equipment and optical modules that will enable a broad ecosystem of interoperable LPO solutions. Accelink, Arista, AMD, Broadcom, Eoptolink, Hisense, Cisco, Innolight, MACOM, Intel, NVIDIA, and Semtech are the founding members of the LPO MSA. Such consortium to define LPO specifications drives the pluggable optics market
North America Pluggable Optics for Data Center Market: Industry Overview
The North America pluggable optics for data center market analysis has been carried out by considering the following segments: components and data rate. In terms of component, the market is segmented into switches, routers, and servers. Based on data rate, the market is categorized into 100–400 Gb/s, 400–800 Gb/s, and 800 Gb/s and above. The North America market is geographically segmented into US, Canada, and Mexico.
Canada held a significant North America Pluggable Optics for Data Center market share in North America.
According to Cloudscene, Canada is the fifth-highest-ranked country in terms of data center density, with a connectivity ecosystem that includes 258 colocation facilities. Most colocation data centers are being built to Tier III specifications. Several local and worldwide operators are present in the Canada data center industry, including Cologix, Equinix, Digital Realty, eStruxture Data Centers, Urbacon Data Centre Solutions, and Vantage Data Centers. In December 2023, AWS announced the debut of its new AWS Canada West (Calgary) Region, which would have three Availability Zones. The corporation intends to invest ~US$ 18 billion in extending Canada’s West and Central regions by 2037. As the country’s usage of cloud-based services grows, major cloud service providers, including Microsoft, Oracle, Google, Amazon Web Services, and Tencent Cloud, are setting up cloud regions. Increased investment in attractive areas such as Montreal and Toronto will raise land prices. Such reasons may cause operators to move their attention to the growing markets such as Calgary and Quebec City during the forecast period.
North America Pluggable Optics for Data Center Market Analysis: Competitive Landscape and Key Developments
The North America pluggable optics for data center market report emphasizes the key factors driving the market and prominent players’ developments. Coherent Corp, Nokia Corp, Cisco Systems Inc, Infinera Corp, Telefonaktiebolaget LM Ericsson, Ciena Corp, Intel Corp, and Lumentum Holdings Inc are among the prominent players profiled in the North America pluggable optics for data center market report. The market players focus on new product launches, expansion and diversification, and acquisition strategies, which allow them to access prevailing business opportunities. A few of the key market developments are listed below:
- In December 2023, Coherent Corp. announced the introduction of its 800G ZR/ZR+ transceiver in ultracompact QSFP-DD and OSFP form factors for optical communications networks. The 800G ZR/ZR+ transceivers from Coherent are the world’s first digital coherent optics (DCO) that can plug directly into QSFP-DD and OSFP transceiver slots on IP routers. Leveraging their high output power of 0 dBm, these transceivers can connect routers directly to access, metro, and regional DWDM transport networks without additional intermediary interfaces, eliminating an entire layer of optical equipment and thereby significantly reducing both capital and operational expenditures.
- In December 2023, Coherent Corp. announced the introduction of its 140 GBaud integrated coherent transmitter-receiver optical subassembly (IC-TROSA), the industry’s first to enable 800G QSFP-DD and OSFP digital coherent optics (DCO) pluggable transceivers for high-speed datacenter interconnects and metro networks.
- In September 2023, Infinera and Sumitomo Electric Industries, Ltd. announced the successful completion of the first demonstration delivering high-speed business services over Sumitomo Electric’s passive optical network (PON) infrastructure with Infinera’s ICE-X intelligent, coherent pluggable optics. The demonstration validated how Sumitomo Electric can leverage next-generation coherent pluggables to provide improvements to network efficiencies and expand capacity while also enabling new high-speed business services and supporting next-generation applications such as 5G and edge computing.
