2018 has been off to an impressive start with many 400 Gbps announcements and likely another record year for data center networking growth. With shipments of 400 Gbps starting in late 2018 and widespread adoption in 2019, it is important to start looking at what is coming next as we look into 2H19 and 2020. All current 400 Gbps announcements are based of 56 Gbps SERDES, so 8 lanes of 50 Gbps. This is an interim technology as the next important technology which has already been demonstrated electrically and optically is single lane 100 Gbps via a 112 Gbps SERDES. 400 Gbps ports ultimately come in two waves, with the second wave being the more important one for the market and being the enabler of an important building block for the market.
112 Gbps SERDES will be the next big building block for data center networks and it is coming sooner rather than later. First, hyperscalers will adopt it as a way to move towards 800 Gbps and beyond. Second and shortly after this, enterprise networks, such as the campus core, and telco networks, such as backhaul will benefit from the technology. 56 Gbps does not have these additional market drivers and is more of an incremental technology. In many ways 112 Gbps SERDES is like 28 Gbps SERDES, with widespread adoption beyond hyperscalers.
The ability to use a gearbox and/or retimers to use existing optics and the ability to rethink how a switch gets built gives the market multiple paths to serial 100 Gbps. OFC 2018 also highlighted that multiple vendors in the ecosystem are looking to quickly move in this direction as well. Bringing the entire supply chain with it will help mitigate the early supply shortages seen with 28 Gbps SERDES in 2016 and 2017. Keeping in mind the hyperscalers buy in units of 100K or 1M at a time, early volumes need to be large with a strong set of suppliers underneath.
There are many factors in the data center that have caused bandwidth to increase more rapidly in the past several years. Hyperscalers, using a combination of hardware acceleration (Smart NIC) and software (implementing SDN) are able to get higher utilization of their infrastructure. At the same time, hyperscalers are in the early stages of micro data center buildouts, their DCI deployments, Artificial Intelligence, and Machine Learning offerings, all of which will quickly consume currently available networking pipes. The increased demand of this new type of application will require hyperscalers to move more quickly to next generation speeds, something that is easily picked up in the supply chain conversations by the increased speed at which higher speed offerings are hitting the market.
It is likely that by the end 2022 that half the bandwidth shipping in the data center switching market will come from 112 Gbps SERDES based products. With the hyperscalers being almost twice the size they are today, it becomes very clear that the market is eagerly awaiting this next generation technology.