January 21, 2003--North America led global consumption of optical modulators in 2002, with a 40% relative market share, according to a new study published by market researcher ElectroniCast (San Mateo, CA). Global consumption value will increase at a strong pace of 38% per year over the next five years, from $266 million in 2002 to over $1.3 billion in 2007, with rapidly rising quantity growth offset by falling average prices. Over the 2007-2012 timeframe, the consumption value growth will continue at an average annual rate of nearly 19%, to reach over $3 billion.
Japan and the rest of the Pacific Rim will gain market share as long haul and high data rate link consumption migrates to Asia from North America. At the end of the forecast timeframe, new build or "green field" long haul/high data rate Asia link consumption will be attributed to China. Optical modulators used (consumed) in the Japan/Pacific region will account for 40% of the global market in 2012.
"Modulators serving the 10-Gbit/sec space will not be the only products needed," says Stephen Montgomery, president of ElectroniCast. "The 2.5-Gbit/sec space is very attractive; 40 Gbits/sec is also expected make an appearance this year. Optical modulators used with high-speed transmitters, which are required to transmit longer distances, are the main application drivers. The actual assembly of transmitters and boards will [migrate] to the Asian region over the forecast period."
ElectroniCast research divides the market into modulator segments: electro-optical, electroabsorption, and other. In 2002, electro-optical modulators, typically utilizing Lithium Niobate as a base held 60% market share of global consumption. Electroabsorption modulators will increase in relative market share over 45% by 2012.
The integration of laser diodes, photo diodes, transmitter/receiver pairs, passive optical components and other optical components has started with the simplest level of hybrid integration in the lower data rate components (155 and 622 Mbits/sec). This will expand steadily into more complex hybrid integration, and into data rate components.
Monolithic integration will proceed with electroabsorption-type modulators, and other elements with relatively higher incidence in higher data rate (2.5, 10 and 40 Gbits/sec), electro-optical modulators will expand to higher data rates; however, the package will be limited to hybrid integration.
Manufacturers have started development of integration of laser diode with modulators and optical waveguide fabricated on a single die. Both electro-optical and electroabsorption modulators are undergoing research and development processes. The main driver for the integration of modulators with other components is economics. In addition, application drivers include a smaller package, less loss and more control of the single package in areas such as temperature.
Competitive alternatives to electroabsorption , Indium Phosphide, and Mach-Zehnder modulator integration and standalone solutions are being developed. Packaging is the key driver, along with economics. Technology advancements are secondary to the packaging and cost issues.