The cost of optics has come down, but not nearly as fast as silicon, said Bill Gartner, VP/GM of Cisco's Optical Systems & Optics, speaking at this week's CiscoLive! event in San Diego.
For 100G systems, roughly 50% of the bill of materials (BoM) is the optics. At 400G, roughly 70% of the BoM is optics. This has spurred Cisco to take a more active role in developing its own optics for data centers, enterprise networks, and even Service Provide and webscale applications. Beyond cost savings, Gartner said Cisco's investment in optics is at the heart of its Intent-based Networking strategy.
Earlier this year, Cisco acquired Luxtera, a developer of silicon photonic technologies, for $660 million in cash and assumed equity awards. Luxtera, which is based in Carlsbad, California, focuses on silicon photonics process and packaging technologies for building integrated optics capabilities for webscale and enterprise data centers, service provider market segments, and other customers. Luxtera leverages a hybrid integration approach wherein the photonics die forms the base of the transceiver chipset, while the light source and electronics die are attached on top. The company says its ability to integrate all optical components into a single silicon chip enables it to manufacture at wafer scale.
In terms of its supply chain, Cisco currently designs its own optical components and relies on contract manufacturers for the actual production. Gartner said Cisco is constantly evaluating whether it makes sense to bring production in-house. Cisco is currently shipping over 10 million transceivers per year. The portfolio current ranges from spans of under 30 meters to metro distances in the 80km range, and from under 1G up to 400G.
Regarding the use of onboard optics and the COBO initiative back by Microsoft and others, Gartner said that a lot of work is underway. Specifically, Luxtera's expertise in this area was one of the reasons that drove Cisco to acquire the firm. Luxtera is actually doing onboard optics. Gartner said you can think about onboard optics as a stepping stone to the idea of packaging optics and silicon, which is something he thinks will be necessary in the future.
