Wednesday, August 9, 2023

Cignal AI: Linear optics and 800G optics forecast

A new report from Cignal AI finds that linear optics face sizable business and technical challenges despite the promise of significant system power savings.

According to the newly released Active Insight report “The Linear Drive Market Opportunity,” only a fraction of Cignal AI’s 800GbE datacenter optics forecast will employ Linear Drive by 2027. 

“There is tremendous excitement for Linear Drive architecture because it addresses the most challenging design problem for high-speed datacenter optics – power consumption – head on,” said Scott Wilkinson, Lead Analyst for Optical Components at Cignal AI. “But while researching the market opportunity, we found that market and technical challenges will limit Linear Drive optics to select hyperscale applications.”

Key findings:

  • Linear Drive offers compelling power savings, but competing solutions are being developed in parallel that will dull its impact.
  • Issues around switch chip support, system design, interoperability, and timing will limit the overall size of the Linear Drive market opportunity.
  • Given the amount of investment being funneled into Linear Drive, some modules will be deployed in niche cases within homogenous hyperscale datacenters.
  • Cignal AI anticipates that less than 10% of our 800GbE datacenter optics forecast will use Linear Drive.

SK hynix previews 321-layer 4D NAND

SK hynix previewed samples of its 321-layer 4D NAND at this week’s Flash Memory Summit (FMS) 2023 in Santa Clara, California. The company plans to raise the level of completion of the 321-layer product and start mass production from the first half of 2025.

The device is the first NAND memory to exceed 300 layers.

SK hynix expects its 321-layer 1Tb TLC NAND comes will bring a 59% improvement in productivity, compared with the earlier generation of 238-layer 512Gb, thanks to the technology development that enabled stacking of more cells and larger storage capacity on a single chip, meaning the total capacity that can be produced on a single wafer increased.

SK hynix also announced that it has started development of the next-generation PCIe Gen6 and UFS 5.0.

Deutsche Telekom raises guidance following strong Q2

For Q2 2023, Deutsche Telekom Group service revenue was up 1.4 percent to 23.0 billion euros (up 3.2 percent in organic terms), while net revenue was down 2.4 percent to 27.2 billion euros. The drop in net revenue was primarily due to the planned withdrawal from the terminal equipment business in the United States. Reported net profit were up 5.4 percent to 1.5 billion euros.

“We continued our successful course in the second quarter,” said CEO Tim Höttges. “Our businesses are developing well, despite complex market environments. This is underscored by our organic growth rates for service revenues, earnings, and free cash flow.”

Some highlights 


  • customer growth continued unabated in all areas, with Telekom remaining the strongest provider in the market. 
  • 67,000 broadband net additions were recorded between April and June of this year. 
  • 43 percent of consumers have now subscribed to a rate plan offering bandwidths of up to 100 Mbit/s or higher. 
  • At 36,000, Magenta TV net additions also exceeded the prior-year quarter.
  • At the end of the first six months of the year, 833,000 customers used an FTTH line, which corresponds to a year-on-year increase of more than 38 percent.

United States

  • With 1.6 million postpaid net additions in the second quarter, T-Mobile US recorded more than its two nationwide competitors, Verizon and AT&T, combined. 
  • The number of postpaid phone customers increased by 760,000, marking the strongest second-quarter growth in eight years. 
  • At the same time, T-Mobile US is losing fewer and fewer customers, as can be seen in the record-low churn rate of just 0.77 percent. For the first time, that is the best rate in the industry. 
  • There is also strong growth in high-speed internet, i.e., internet access at home through mobile communications. 3.7 million customers are already using this product, with 509,000 net additions in the second quarter alone.


  • Revenue increased by 6.2 percent to 2.9 billion euros. Earnings increased by 3.9 percent year-on-year. This marked 22 consecutive quarters of adjusted EBITDA AL growth, more than offsetting the negative effect of higher energy prices. 
  • The number of broadband lines increased by 72,000 in the second quarter, the number of customers using fixed-mobile convergence products by 152,000, and the number of TV customers by 34,000. 
  • Mobile contract net additions totaled 173,000.

Intel cites progress with fabs in Ohio, Arizona, Oregon

On the one year anniversary of the CHIPS and Science Act being enacted into law, Intel provided an update on the new manufacturing facilities and programs.

Some highlights

  • Intel is doubling down on research and development (R&D) that will fuel new, leading-edge chip manufacturing facilities 
  • Intel is investing in much-needed workforce development programs to ensure American workers have the necessary skills and talent to out-innovate the competition and meet the long-term demand for leading-edge semiconductors.
  • Intel is executing on or ahead of schedule to deliver five process nodes in four years and return process technology leadership to the U.S. by 2025. 
  • As a member of the CHIPS Industrial Advisory Committee (IAC), Intel is working to make the National Semiconductor Technology Center (NSTC) and National Advanced Packaging Manufacturing Program (NAPMP) successful ventures. 
  • In 2021, Intel announced more than $43.5 billion in new manufacturing investments across Arizona, New Mexico and Ohio.
  • Intel is expanding in Arizona from two to four leading-edge semiconductor factories that are estimated to cost $15 billion to $20 billion each.
  • In New Mexico, Intel is investing at least $3.5 billion on equipment upgrades for advanced semiconductor packaging operations. W
  • Intel’s greenfield investment in two new leading-edge fabs in Ohio marks the single largest private-sector investment in the state's history. This “Silicon Heartland” will establish a new regional economic cluster for U.S. chipmaking and become an epicenter of leading-edge technology.
  • In Oregon, Intel proposed a multibillion-dollar expansion and modernization of our facilities that will put the company on a path to regain process technology leadership and continue to advance Moore’s Law.
  • Intel announced a $100 million investment last year to expand semiconductor education, research and workforce training opportunities across the nation. This includes a $50 million match for a total $100 million partnership with the National Science Foundation to expand opportunities in the United States. It also includes a $50 million investment to fund the Intel Semiconductor Education and Research Program (SERP) for Ohio – a collaborative, multi-institution program designed to directly support our new operations in Ohio.

Dell'Oro: Service Provider router market to hit $77B over 5 years

 The cumulative revenues spent on Service Provider (SP) Router and Switch equipment are projected to approach $77 billion over the next five years, according to a new report from Dell'Oro Group. This represents a 9 percent increase compared to the cumulative revenue of the previous five-year period, propelled largely by a combination of applications driving higher volumes of traffic such as proliferation of 5G on mobile networks, residential broadband shifting to higher speed Cable, and PON, and increased use of video.

“Although we’ve seen strong market growth in 2023, double the normal growth rate, we expect it to be short term. Vendors have been building backlog for two years and the recent strong growth is a result of improved component supply which enabled vendors to release large quantities of product into the market,” stated Ivaylo Peev, Senior Analyst at Dell’Oro Group. “We saw particularly strong sales to hyperscalers in North America at the beginning of 2023. Large Cloud SPs deploy routers to interconnect geographically dispersed facilities, connect to Telecom SP wide area networks, and connect inside the data centers. However, we believe that the surge in sales to Cloud SPs has passed its peak and will slow over the forecast period. Cloud SPs have heavily invested in 400 Gbps infrastructure in the last few years and are well prepared for AI workloads,” added Peev.

Some highlights:

  • Dell'Oro expects the combined SP Edge Router and Aggregation Switch segment’s growth to be propelled by SPs’ expansion of mobile backhaul networks followed by broadband expansion. 
  • Broadband SP investment in fiber will result in significant traffic increases. 
  • Broadband providers will continue upgrading Edge Routers to support faster speeds and lower latency.
  • Disaggregated Router sales are gaining share, and it is anticipated that this trend will continue throughout the forecast horizon. Existing Telecom SP projects are progressing, and new use cases are moving from testing to production. 
  • Growth is driven by ongoing deployments in the maturing AT&T project as well as by new deployments by Turkcell, the leading mobile operator of Turkey, and KDDI Corporation, a Tier One Japanese telecom operator.

GlobalFoundries posts Q2 sales of $1.845B, down 7% yoy

GlobalFoundries Inc. (GF) reported Q2 revenue of $1,845 million, net income of $237 million, and adjusted net income of $297 million. Gross margin was 28.8% and adjusted gross margin was 29.6%.

"In the second quarter, GF delivered financial results at the upper end of the guidance ranges we provided in our May earnings release" said Dr. Thomas Caulfield, president and CEO of GF. "Despite the cyclical headwinds impacting our industry and continued macroeconomic uncertainty, we delivered consistent financial performance and generated $146 million of free cash flow in the quarter, as GF’s global teams diligently managed costs, while driving differentiated solutions to meet our customers' needs, across several critical growth markets."

Recent Business Highlights

* GF and Lockheed Martin announced a strategic collaboration to advance U.S. semiconductor manufacturing and innovation and to increase the security, reliability and resilience of domestic supply chains for national security systems.

* The U.S. Department of Defense accredited GF's advanced manufacturing facility in Malta, New York, as a Category 1A Trusted Supplier with the ability to manufacture secure semiconductors for a range of critical aerospace and defense applications.

Infinera posts Q2 sales of $376.2 million

Infinera reported Q2 GAAP revenue of $376.2 million compared to $392.1 million in the first quarter of 2023 and $358.0 million in the second quarter of 2022.

GAAP gross margin for the quarter was 38.0% compared to 37.5% in the first quarter of 2023 and 30.5% in the second quarter of 2022. Non-GAAP net loss for the quarter was $(0.7) million, or $(0.00) per diluted share, compared to non-GAAP net income of $5.7 million, or $0.02 per diluted share, in the first quarter of 2023, and non-GAAP net loss of $(10.1) million, or $(0.05) per diluted share, in the second quarter of 2022.

Infinera CEO David Heard said, “The second quarter was another solid quarter in which revenue, margins, and earnings per share beat consensus estimates and came in above the mid-point of our outlook range. On a year-over-year basis, we grew revenue by 5% in the quarter and 10% in the first half of the year, and expanded quarterly gross margin by more than 300 basis points. We continued to win new strategic deals with major telecom service providers and hyperscale customers in the Systems business and have received additional orders for our Subsystems business as well.”

“While the second half industry outlook is cautious with customers working down inventory and slowing the pace of new technology investments, we remain confident in our plan to deliver earnings per share expansion in 2023 on our path to generating at least a $1 per share in earnings by 2025-2026,” continued Mr. Heard.