The AI era has placed higher demands on computing power. Has the lithium niobate thin film optical modulator taken the lead?
With the rapid development of the information age, we have entered a digital, intelligent, and information-based era. In today's era, industries such as cloud computing, artificial intelligence, video conferencing, short videos, and various social media platforms are thriving. The repeated version updates and iterations of ChatGPT-OpenAI have ushered us into a new era of AI. At the end of 2023, at the Huawei Full Connection Conference, Meng Wanzhou stated in a speech, "Computing power is the core driving force for the development of artificial intelligence. The scarcity and high cost of computing power have become the core factors restricting the development of AI." As Meng Wanzhou said, the AI smart computing era does indeed place new demands on computing power, as well as higher requirements for transmission speed and capacity.
As the cornerstone of AI computing, optical communication's importance is self-evident. This is because optical communication has many advantages such as high speed, wide bandwidth, good confidentiality, and low loss, which can effectively improve the transmission speed and capacity of information on critical paths. Combined with advanced digital signal processing technology, optical communication technology can achieve efficient transmission with ultra-high speed, ultra-large capacity, ultra-long distance, and ultra-flexible dimensions.
We know that optical communication mainly uses optical signals to carry the information that needs to be transmitted, thus achieving long-distance data transmission. The modulator is the most crucial part of this process, acting like a "magician." When data needs to be sent, the modulator loads the electrical signal onto the optical carrier, allowing the electrical signal to travel in the form of light.
In today's era, due to the rapid development of industries such as artificial intelligence, cloud computing, and the Internet of Things, the demand for data transmission capacity and speed is becoming increasingly urgent. Researching and developing efficient optical modulators has become a top priority in the field of optical communication.
Classification and characteristics of optical modulators
Currently, the mainstream electro-optic modulators on the market mainly consist of three types: silicon-based modulators, indium phosphide modulators, and the highly anticipated lithium niobate modulators. Their respective advantages, disadvantages, applicable scenarios, and speeds are shown in the table below.
It is worth noting that lithium niobate material is considered an ideal choice for preparing high-performance electro-optic modulators due to its excellent electro-optic characteristics, especially thin film lithium niobate modulators, which can be called the leader among similar products. This is because, unlike devices that use nonlinear modulation methods such as silicon-based modulators and indium phosphide modulators, the working mechanism of lithium niobate modulators is independent of the movement of charge carriers. It uses the linear electro-optic effect to load the electrical modulation signal onto the optical carrier, and the modulation speed is mainly determined by the performance of the microwave electrode, thus achieving higher modulation speed and linearity, as well as lower power consumption. By cleverly designing traveling wave electrodes, thin film lithium niobate devices can easily achieve a 3 dB bandwidth of over 100 GHz, which will have a significant impact on high-speed optical communication, optical interconnection, and on-chip optical computing.
Market analysis and advanced progress of science and technology enterprises
Under the traction of the big data and AI wave, the global demand for intelligent computing power will continue to grow rapidly. Optical modules, as key components for high-speed data transmission, have attracted much attention. Let's first take an overview of the global and domestic markets, and then focus on some recent specific developments.
Analysis of global and domestic market data for optical modules
Optical modules are located in the midstream industry of optical communication, and the proportion of optical modulators as optical devices in optical modules can be clearly seen from the figure below. Optical communication devices occupy a huge proportion of up to 73% in optical modules. According to Yole's data statistics, the global market size of optical modules in 2022 is approximately $9.7 billion, with a year-on-year growth of 15.9%. The global data volume is currently showing a continuous upward trend, which will drive the continuous expansion of the capacity of the optical module market. It is predicted that the global market size of the optical module industry will reach $13 billion by 2025.
Looking at the domestic market, thanks to the continuous growth in communication demand, the market output of optical modules and other optical communication devices has continued to rise. In 2021, the market output of optical module products in China reached approximately 370 million units, with a year-on-year growth of about 23.3%. In 2022, the market output further increased, exceeding 400 million units for the first time, reaching 480 million units.
In terms of market sales, in 2021, the market sales of optical module products in China reached 290 million units. In 2022, domestic market sales continued to increase, reaching approximately 460 million units. With the rise of artificial intelligence technology, it is expected that domestic market sales will continue to increase.
The Market Landscape of Thin Film Lithium Niobate Modulators
The most essential part of the thin film lithium niobate modulator is definitely the lithium niobate crystal. Therefore, let's first take a look at the global market landscape of lithium niobate. In the global lithium niobate crystal market, Apelco (Germany), Sumitomo Metal (Japan), and KorthKristalle (Germany) are the top three. The main participants in China's lithium niobate crystal market include: Crystal Technology, Tiantong Stock, Deqing Huaying, and Nan Zhixin Materials. Among them, Crystal Technology, as the world's largest non-linear optical crystal manufacturer, provides various specifications of lithium niobate crystals, and its related products have been successfully marketed to Lumentum and other optical device manufacturers.
We know that the thin film lithium niobate optical modulator is an essential component of the 1.6T optical module. Only the thin film lithium niobate electro-optic modulator can meet the high computing power standards, with the characteristics of low loss, small size, and high bandwidth. However, the research and development of thin film lithium niobate modulators is not an easy task. Its process complexity is extremely high, and it has strict requirements for technology and production capabilities. There are only three suppliers in the world that can supply in large quantities: Fujitsu and Sumitomo in Japan, and Lightcore Technology. Among them, Fujitsu occupies 70% of the global market share.
I also want to mention the domestic enterprise Lightcore Technology. In 2019, Lightcore Technology acquired the lithium niobate modulator production line from Lumentum in the United States. In 2023, it showcased the lithium niobate modulator at the Fiber Optic Communication Exhibition in the United States and increased its capital in October 2023 to establish a thin film lithium niobate modulator chip production base in Milan, Italy. As the only domestic enterprise capable of mass producing lithium niobate modulators and successfully developing a new generation of thin film lithium niobate technology, Lightcore Technology is also a member of the NVIDIA supply chain, making it a shining new star.
In addition, when it comes to thin film lithium niobate technology, we cannot ignore two other domestic enterprises, Niobium Optoelectronics and Yuanxin Optoelectronics.
Niobium Optoelectronics is a company dedicated to the research, design, and manufacturing of thin film lithium niobate modulator chips and devices, committed to creating world-class high-speed modulator optoelectronic chips. Niobium Optoelectronics' thin film lithium niobate technology is at the forefront globally, and its 800G/1.6T series of products are already in the sampling or small batch stage, making it worth paying attention to its future development.
Yuanxin Optoelectronics has excellent thin film lithium niobate photon integration technology. At the just-concluded 2024 Optical Network and Communication Symposium and Exhibition, Yuanxin Optoelectronics showcased its latest research results in the field of thin film lithium niobate photon integrated circuits (TFLN PICs), including technological leadership, production stability, and the first public reliability data, which has attracted widespread attention from participants. It is worth mentioning that in the Market Watch Panel III of this conference, many internationally renowned companies such as Fujitsu, Ciena, and Marvell have indicated that they are researching or seriously considering using thin film lithium niobate as a coherent transmitter. This trend indicates that thin film lithium niobate technology is gradually becoming the mainstream choice for the global optical communication industry.
Niobium Optoelectronics and Yuanxin Optoelectronics have injected new vitality into the development of the domestic optical communication industry. With the continuous maturity of thin film lithium niobate technology and the expansion of application scenarios, it is believed that more rising stars will emerge in the future, which will drive the continuous innovation and development of the optical communication industry.
Progress of 1.6T Optical Modules May Exceed Market Expectations
Based on the high performance, low cost, small size, mass production capability, and compatibility with CMOS processes of thin film lithium niobate modulators, using thin film lithium niobate to produce optical modules is an extremely competitive solution in high-speed optical communication. The structure of thin film lithium niobate optical modules is similar to silicon photonics, requiring CW light sources, DSP, drivers (depending on the situation), AWG or parallel optical components, and thin film lithium niobate chips. The most important core component among them is the thin film lithium niobate chip. An 800G optical module generally requires one thin film lithium niobate chip, while a 1.6T module requires 1-2 thin film lithium niobate chips. As a high-speed transmission technology, the 1.6T optical module has a data transmission rate of up to 1.6 terabits per second, which can meet the high network bandwidth requirements of artificial intelligence applications, ensuring efficient data transmission and model deployment.
In the process of training and applying artificial intelligence algorithms, a large amount of data needs to be transmitted and processed, and high-speed and stable data transmission is an important guarantee for ensuring the correct training and rapid deployment of algorithm models. Therefore, major AI giants have an urgent demand for 1.6T. As early as the end of 2023, it was reported that NVIDIA was rushing orders, as NVIDIA is about to release the super-performance B100 corresponding to the server network card upgrade to 800G, and the switch-side optical module upgrade to 1.6T, with a GPU: 1.6T optical module configuration ratio of about 1:2.5. It is reported that a small number of early samples of NVIDIA's B100 will be shipped in the second quarter of 2024 and is expected to be mass-produced in the third quarter of 2024, so NVIDIA has had a large demand for 1.6T optical modules. In addition, with Google's stunning release of the Gemini large model and the launch of the supporting system TPU v5p, driven by high demand growth, Google also has a large demand for 1.6T optical modules. In addition, Amazon may directly jump to 1.6T for a large part of its products in the second half of this year or next year, or use both 800G and 1.6T.
Summary and Outlook
The lithium niobate thin film optical modulator, as the core of the 1.6T optical module, can be said to be the strongest incremental link of the 1.6T optical module. As mentioned earlier, in the era of rapid rise of AI technology, the demand for 1.6T optical modules with efficient transmission capabilities will continue to increase. And in the 1.6T optical module, there is currently no substitute for lithium niobate thin film crystals, so as the title suggests, the lithium niobate thin film optical modulator has taken the lead, laying a solid foundation for high-speed optical communication. But does the lithium niobate thin film optical modulator have no flaws or advantages? The answer is definitely no.
The increase in transmission rate is bound to bring about major problems such as increased power consumption, increased transmission loss, and increased cost. The upgrade of optical module technology is not just a simple doubling of the rate, but also the need to solve the problems of high power consumption and high cost brought about by the increase in rate.
The author believes that the future research and development focus of lithium niobate thin film should be on providing high-speed electro-optical control, low-loss transmission, and scalability when applied to larger-scale on-chip systems. In addition, large-scale photon integration based on lithium niobate thin film crystals is also a direction worth paying attention to. Photon integration technology provides an effective way to break through the communication capacity bottleneck of large-scale optical fiber networks and achieve large-scale optoelectronic integration.
Recently, East China Normal University and the Shanghai Institute of Optics and Fine Mechanics have achieved a 4×4 programmable linear photonic processor on a lithium niobate thin film substrate. The device has shown significant advantages in terms of loss, power consumption, and processing speed. It is believed that in the near future, photon integration technology based on niobate crystal will also enter the commercial stage.