New CIR Report Says U.S. Optical Switching Component and Subsystem Market to Reach $1.1 Billion by 2005, but Warns that New Switching Technology is Not All It Seems

Apr 19, 2001, 01:00 ET from Communications Industry Researchers, Inc.

    CHARLOTTESVILLE, Va., April 19 /PRNewswire/ -- "Optical Switching
 Subsystems And Components: Markets And Trends," a new report from
 Communications Industry Researchers, (CIR), an optical industry market
 research firm based here, claims that new developments in optical switching
 technology will create a $1.1 billion U.S. market opportunity by 2005. (See
 attached Exhibit.)  While this represents a big leap forward from the $152
 million figure that the U.S. market is worth today, the new CIR report
 cautions that many challenges need to be addressed.
 
     Mechanical Solutions
     Opto-mechanical switches have been around for over a decade and CIR
 believes that, despite the onslaught from new technologies, the U.S. market
 for mechanical switching subsystems will grow slowly from $63 million today to
 $77 million in 2004. CIR attributes the survival of opto-mechanical switching
 to the fact that these switches continue to be used for some protection and
 test equipment functions and equipment vendors see no need to try more
 "innovative" technologies.
     Yet, CIR warns that some mechanically oriented vendors, such as DiCon,
 appear too complacent about the threat from new technologies.  By contrast, it
 commends such vendors as Oplink and Optical Switch Corporation for being aware
 of future technology challenges as well as finding innovative product designs
 that improve on mainstream opto-mechanical switching.
 
     In MEMS We Trust?
     CIR predicts a much bigger opportunity for MEMS-based switches, and sees
 the U.S. market growing from $43 million today to almost $600 million by 2005.
 The report notes that almost every major optical components vendor including
 Agere, JDS Uniphase and Corning, along with a host of start ups, such as C
 Speed and Onix, are now involved with MEMS switching products.  And almost all
 of the potential important vendors of optical crossconnects -- including
 Alcatel, Lucent, Nortel, Calient and others -- are betting that MEMS will help
 lead them to their all-optical futures.
     CIR believes that MEMS is the most important enabler of optical switching
 to come along in many years, but also points out that MEMS is no optical
 switching panacea.  At the present time, only one components/sub-systems
 vendor, OMM, is shipping MEMS sub-systems in production quantities.  CIR also
 notes that the 3D MEMS that will be necessary to build equipment with higher
 port densities will not be delivered in quantity until the end of 2001 and is
 of unproven reliability.  And it points out that MEMS-based optical
 crossconnects, such as Lucent's LambdaRouter have yet to be successful in the
 marketplace and are being significantly outsold by OEO grooming switches such
 as Ciena's CoreDirector.
 
     Fulfilling the Dream
     OPTICAL SWITCHING SUBSYSTEMS AND COMPONENTS: MARKETS AND TRENDS goes on to
 note that solid-state optical switching technology has begun to progress
 rapidly.  The dream has always been to build an optical switch on a chip that
 parallels the electronic switching chips that currently form the guts of most
 telecommunications systems and CIR points out that several companies appear to
 be making significant progress towards fulfilling that dream -- examples of
 such companies include Brimcom, Lynx and NTT Electronics.
     CIR predicts that the U.S. market for "solid state" optical switching
 components and sub-systems will grow from $18 million today to $202 million in
 2005.  But, it cautions that these new all-optical switching products have
 very low port counts and, most are not shipping yet.  At present these
 switches are most useful in protection switching systems, where their fast
 switching speeds are of considerable benefit.
     However, the new CIR report suggests that some of the vendors of solid
 state optical switching components and sub-systems may be focusing too much on
 switching speeds in promoting their new products.  It mentions Brimcom,
 especially, in this regard and notes that, while very high switching speeds --
 in the few nanosecond range -- may be possible with solid state switches, such
 speeds may be useful primarily for optical packet switching, a technology
 itself that is many years from commercialization.  By contrast, CIR praises
 Trellis Photonics for its realistic view of optical switching.  Rather than
 being concerned with futuristic applications, Trellis, is building a small
 crossconnect system, using a solid state technology called "electro-
 holography," which it says can improve on OEO switches in terms of switching
 times and power management.
     According to the new CIR report, the area in which solid-state optical
 switching has truly made progress in the past year is the recognition that it
 is possible to build such switches using silicon, rather than exotic
 materials, such as Lithium Niobate.  This opens up the way to build optical
 switches using conventional microelectronics manufacturing processes, leads to
 higher yields, and makes it easier to create optical integrated circuits of
 which switching is only a part.
     OPTICAL SWITCHING SUBSYSTEMS AND COMPONENTS: MARKETS AND TRENDS covers the
 markets for 2D MEMS, 3D MEMS, liquid crystal, solid state, mechanical and OEO
 switching components and sub-systems for applications including optical
 crossconnects, optical add/drop multiplexers, and protection switches.  It
 includes profiles and strategic assessments of approximately 30 vendors of
 optical switching sub-systems and components, along with case studies and
 analyses of the optical switching component/sub-system requirements of 14
 leading equipment vendors.   In addition, OPTICAL SWITCHING SUBSYSTEMS AND
 COMPONENTS: MARKETS AND TRENDS includes five-year forecasts of optical
 switching sub-systems broken down by technology type, application, port-size
 and whether it is a sub-system or component.  Finally, the report contains a
 detailed assessment of all the major technologies currently being proposed for
 optical switching.
     CIR's new report is available to interested buyers at a cost of $4,500 for
 hard copy and may also be purchased in electronic format.  For additional
 information about the report including a table of contents and ordering
 information, please visit CIR's Web site at http://www.cir-inc.com or contact
 Robert Nolan at CIR's main office at (804) 984-0245 ext. 15 or
 robert.nolan@cir-inc.com .  Members of the accredited trade press may receive
 a full Executive Summary as well as schedule interviews with the analysts of
 this report by contacting Lisa Rogers at (804) 984-0245 ext. 13 or
 lisa.rogers@cir-inc.com .
     CIR is a leading industry analyst firm specializing in the areas of Fiber
 Optic Networking Systems, Software and Components. Through its reports, market
 advisory services and custom client engagements, CIR provides insightful
 research, analysis and consulting services available for the optical market.
 CIR relies upon Service Provider activities and "demand side" research as the
 basis for its opinions and forecasts.  The firms' results are market oriented
 and not vendor sponsored.
 
     U.S. Optical Switching Components andSub-Systems Markets
                         ($ Millions)
                                        2001            2002          2005
     OEO                                 7.6            14.7          32.4
     Mechanical                         63.3            69.0          65.4
     2D MEMS                            43.0            95.3         298.0
     3D MEMS                             0.0            25.3         297.2
     Liquid Crystal                     20.5            52.3         199.3
     Waveguide and other solid state    18.2            41.2         202.0
     TOTAL                             152.6           297.7        1094.3
 
 
 

SOURCE Communications Industry Researchers, Inc.
    CHARLOTTESVILLE, Va., April 19 /PRNewswire/ -- "Optical Switching
 Subsystems And Components: Markets And Trends," a new report from
 Communications Industry Researchers, (CIR), an optical industry market
 research firm based here, claims that new developments in optical switching
 technology will create a $1.1 billion U.S. market opportunity by 2005. (See
 attached Exhibit.)  While this represents a big leap forward from the $152
 million figure that the U.S. market is worth today, the new CIR report
 cautions that many challenges need to be addressed.
 
     Mechanical Solutions
     Opto-mechanical switches have been around for over a decade and CIR
 believes that, despite the onslaught from new technologies, the U.S. market
 for mechanical switching subsystems will grow slowly from $63 million today to
 $77 million in 2004. CIR attributes the survival of opto-mechanical switching
 to the fact that these switches continue to be used for some protection and
 test equipment functions and equipment vendors see no need to try more
 "innovative" technologies.
     Yet, CIR warns that some mechanically oriented vendors, such as DiCon,
 appear too complacent about the threat from new technologies.  By contrast, it
 commends such vendors as Oplink and Optical Switch Corporation for being aware
 of future technology challenges as well as finding innovative product designs
 that improve on mainstream opto-mechanical switching.
 
     In MEMS We Trust?
     CIR predicts a much bigger opportunity for MEMS-based switches, and sees
 the U.S. market growing from $43 million today to almost $600 million by 2005.
 The report notes that almost every major optical components vendor including
 Agere, JDS Uniphase and Corning, along with a host of start ups, such as C
 Speed and Onix, are now involved with MEMS switching products.  And almost all
 of the potential important vendors of optical crossconnects -- including
 Alcatel, Lucent, Nortel, Calient and others -- are betting that MEMS will help
 lead them to their all-optical futures.
     CIR believes that MEMS is the most important enabler of optical switching
 to come along in many years, but also points out that MEMS is no optical
 switching panacea.  At the present time, only one components/sub-systems
 vendor, OMM, is shipping MEMS sub-systems in production quantities.  CIR also
 notes that the 3D MEMS that will be necessary to build equipment with higher
 port densities will not be delivered in quantity until the end of 2001 and is
 of unproven reliability.  And it points out that MEMS-based optical
 crossconnects, such as Lucent's LambdaRouter have yet to be successful in the
 marketplace and are being significantly outsold by OEO grooming switches such
 as Ciena's CoreDirector.
 
     Fulfilling the Dream
     OPTICAL SWITCHING SUBSYSTEMS AND COMPONENTS: MARKETS AND TRENDS goes on to
 note that solid-state optical switching technology has begun to progress
 rapidly.  The dream has always been to build an optical switch on a chip that
 parallels the electronic switching chips that currently form the guts of most
 telecommunications systems and CIR points out that several companies appear to
 be making significant progress towards fulfilling that dream -- examples of
 such companies include Brimcom, Lynx and NTT Electronics.
     CIR predicts that the U.S. market for "solid state" optical switching
 components and sub-systems will grow from $18 million today to $202 million in
 2005.  But, it cautions that these new all-optical switching products have
 very low port counts and, most are not shipping yet.  At present these
 switches are most useful in protection switching systems, where their fast
 switching speeds are of considerable benefit.
     However, the new CIR report suggests that some of the vendors of solid
 state optical switching components and sub-systems may be focusing too much on
 switching speeds in promoting their new products.  It mentions Brimcom,
 especially, in this regard and notes that, while very high switching speeds --
 in the few nanosecond range -- may be possible with solid state switches, such
 speeds may be useful primarily for optical packet switching, a technology
 itself that is many years from commercialization.  By contrast, CIR praises
 Trellis Photonics for its realistic view of optical switching.  Rather than
 being concerned with futuristic applications, Trellis, is building a small
 crossconnect system, using a solid state technology called "electro-
 holography," which it says can improve on OEO switches in terms of switching
 times and power management.
     According to the new CIR report, the area in which solid-state optical
 switching has truly made progress in the past year is the recognition that it
 is possible to build such switches using silicon, rather than exotic
 materials, such as Lithium Niobate.  This opens up the way to build optical
 switches using conventional microelectronics manufacturing processes, leads to
 higher yields, and makes it easier to create optical integrated circuits of
 which switching is only a part.
     OPTICAL SWITCHING SUBSYSTEMS AND COMPONENTS: MARKETS AND TRENDS covers the
 markets for 2D MEMS, 3D MEMS, liquid crystal, solid state, mechanical and OEO
 switching components and sub-systems for applications including optical
 crossconnects, optical add/drop multiplexers, and protection switches.  It
 includes profiles and strategic assessments of approximately 30 vendors of
 optical switching sub-systems and components, along with case studies and
 analyses of the optical switching component/sub-system requirements of 14
 leading equipment vendors.   In addition, OPTICAL SWITCHING SUBSYSTEMS AND
 COMPONENTS: MARKETS AND TRENDS includes five-year forecasts of optical
 switching sub-systems broken down by technology type, application, port-size
 and whether it is a sub-system or component.  Finally, the report contains a
 detailed assessment of all the major technologies currently being proposed for
 optical switching.
     CIR's new report is available to interested buyers at a cost of $4,500 for
 hard copy and may also be purchased in electronic format.  For additional
 information about the report including a table of contents and ordering
 information, please visit CIR's Web site at http://www.cir-inc.com or contact
 Robert Nolan at CIR's main office at (804) 984-0245 ext. 15 or
 robert.nolan@cir-inc.com .  Members of the accredited trade press may receive
 a full Executive Summary as well as schedule interviews with the analysts of
 this report by contacting Lisa Rogers at (804) 984-0245 ext. 13 or
 lisa.rogers@cir-inc.com .
     CIR is a leading industry analyst firm specializing in the areas of Fiber
 Optic Networking Systems, Software and Components. Through its reports, market
 advisory services and custom client engagements, CIR provides insightful
 research, analysis and consulting services available for the optical market.
 CIR relies upon Service Provider activities and "demand side" research as the
 basis for its opinions and forecasts.  The firms' results are market oriented
 and not vendor sponsored.
 
     U.S. Optical Switching Components andSub-Systems Markets
                         ($ Millions)
                                        2001            2002          2005
     OEO                                 7.6            14.7          32.4
     Mechanical                         63.3            69.0          65.4
     2D MEMS                            43.0            95.3         298.0
     3D MEMS                             0.0            25.3         297.2
     Liquid Crystal                     20.5            52.3         199.3
     Waveguide and other solid state    18.2            41.2         202.0
     TOTAL                             152.6           297.7        1094.3
 
 
 SOURCE  Communications Industry Researchers, Inc.