Classification of Optical Chips for Optical Communication Credit and Application Fields of Different Types of Semiconductor Materials Downstream
Semiconductor materials include three categories: 1. Single element semiconductor materials, which are composed of a single element, mainly including silicon (Si) and germanium (Ge). Among them, silicon based semiconductor materials are currently the largest in production, the lowest in cost, and the most widely used semiconductor materials; 2. III-V group compound semiconductor materials, namely semiconductor materials composed of III-V group elements, mainly including gallium arsenide (GaAs) and indium phosphide (InP), have high electron mobility and good photoelectric performance, and are currently the most mature semiconductor materials after silicon. They are used in 5G communication, data centers, fiber optic communication, next-generation displays, artificial intelligence, unmanned driving, wearable devices There are broad application prospects in aerospace; 3. Wide bandgap semiconductors, represented by gallium nitride (GaN) and silicon carbide (SiC), have characteristics such as high bandgap width, high voltage resistance, and high power. They have broad prospects in fields such as communication and new energy vehicles, but currently have high costs.
Optical chip classification for Guangtong Credit
Optical chips can be divided into laser chips and detector chips according to their functions. Laser chips are mainly used to transmit signals and convert electrical signals into optical signals, while detector chips are mainly used to receive signals and convert optical signals into electrical signals. Laser chips can be further divided into surface emitting chips and edge emitting chips according to their optical structure. Surface emitting chips include VCSEL chips, while edge emitting EEL chips include FP, DFB, and EML chips; Detector chips mainly include PIN and APD. Laser chips can be divided into two material systems based on material systems: gallium arsenide GaAs and indium phosphide Inp.
Indium phosphide optical chips: classification and downstream applications
According to conductivity, InP substrates are mainly divided into semi conductive and semi insulating substrates. Semiconductor substrates are divided into N-type and P-type semi conductive substrates: 1) N-type doped Sn InP is mainly used for laser diodes. 2) N-type S doped InP is not only used for laser diodes, but also for photodetectors. 3) P-type doped Zn InP is mainly used for high-power laser diodes. Semi insulating substrates are divided into doped and undoped semi insulating substrates based on whether they are doped or not. Semi insulating substrates are mainly used for making RF devices. From the global application of indium phosphide substrates, according to Yole data, the sales of optical module devices, sensor devices, and high-end RF devices accounted for 83%, 4%, and 14% respectively in 2020. Optical module devices and high-end RF devices are the main downstream applications of indium phosphide.
Location and application structure diagram of optical chips in optical communication systems
Optical communication is a system that uses optical signals as information carriers, optical fibers as transmission media, and electro-optical conversion to transmit information using optical signals. During the signal transmission process of the optical communication system, the transmitting end converts the electrical signal into an optical signal through a laser chip, which is transmitted to the receiving end through optical fibers. The receiving end converts the optical signal into an electrical signal through a detector chip. The optical chip is processed and packaged into optical emission components (TOSA) and optical reception components (ROSA), and then further processed into optical modules from optical transceiver components, electrical chips, structural components, etc. The performance of optical chips directly determines the transmission rate of optical modules and is one of the core components of the optical communication industry chain.
Optical chips and components: the largest cost item in optical modules
According to the cost composition of optical modules disclosed by Zhongji Xuchuang from January to August 2016, chip costs accounted for 60-70% (optical chips and components accounted for 50%, the largest proportion; electrical chips accounted for 15%), and labor and other costs accounted for 23%; The chips in the optical module include: optical chips (laser chips and detector chips), electrical chips (LD driver chips, TIA cross impedance amplification chips, CDR clock and data circuits, DSP, MUX&DeMUX, etc.).
Market size and competitive landscape of indium phosphide optical chips
Global market size of indium phosphide chips
According to Yole's prediction, the application field of indium phosphide devices is expanding from the traditional data communication and telecommunications market to the C-end consumer market. It is expected that the downstream application scale will reach approximately 5.2 billion US dollars by 2026, and the annual compound growth rate from 2020 to 2026 will be 16%. Data communication and telecommunications will still be the largest application areas of indium phosphide, with continuous demand for indium phosphide laser devices brought by the full optical backbone network and 400G/800G optical modules in data centers. However, the growth rate of applications in the consumer electronics field is faster, such as 3D sensing, wearable devices, and non perforated screen sensing.
Data communication market: 400G and 800G gradually become the main players
The deployment of 400G by large-scale data center operators reflects the growing demand for cloud services from users, as well as the need for higher bandwidth to support demanding applications, including artificial intelligence (AI), machine learning (ML), and video processing. According to LightCounting and Zhongji Xuchuang, there will be more demand for 800G optical modules in data centers starting from 2023, and gradually increasing thereafter. In 2024, the demand for 800G will further increase, with sales expected to exceed 400G.
Telecom market: upgrading of fiber optic broadband and base station transmission
Fiber optic broadband PON technology is a broadband access technology based on passive ODN networks. 10G PON technology has been widely commercialized, providing users with up to 1Gbps of bandwidth and achieving gigabit network coverage; The next generation PON is expected to be 25G/50G PON, while 50G and 100G/200G PON have been regarded as the subsequent evolution technologies of 10G PON by IEEE, ITU, FSAN, and other standard organizations. In terms of 5G forward network, the C-RAN networking mode has been widely deployed, and 25Gb/s xWDM optical modules have been widely used. For future application scenarios such as higher channel Massive MIMO base stations, U6G frequency band base stations, and millimeter wave base stations, the bandwidth demand for forward transmission networks will be further increased. While retaining the existing number of ports and saving fiber resources, the industry has initiated research on the next generation 5G forward transmission module technology at 50Gb/s and higher speeds.
Market size of indium phosphide chips
By extrapolating from the optical module market to the optical chip market, Yuanjie Technology predicts that the overall optical chip market in 2021 will be around 15 billion yuan, with fiber optic access, mobile communication, and data centers accounting for 1.4 billion, 7 billion, and 6.3 billion yuan, respectively. According to C&C's prediction, the global optical chip market will have a compound annual growth rate of 12.59% from 2020 to 2025, mainly benefiting from the construction and application of 5G networks, as well as the comprehensive upgrading of network infrastructure such as data centers, access networks, and metropolitan backbone networks. According to ICC's prediction, from 2019 to 2024, the sales scale of Chinese optical chip manufacturers will continue to increase as a proportion of the global optical chip market, with faster growth in medium to high-speed optical chips. The optical chip market of 2.5G and below is dominated by domestic optical chip companies; Chinese enterprises have basically mastered the core technology of 10G optical chips, but some models of products still have high technical barriers and rely on imports; Laser chips of 25G and above are mainly supplied by overseas suppliers.
Share of each rate manufacturer
2.5G and below optical chips: mainly used in the fiber optic access market, domestic optical chip companies have already occupied the main market share. 10G optical chip: mainly used in the fiber optic access market, mobile communication network market, and data center market. Chinese optical chip companies have basically mastered the core technology of 10G optical chips, but some models of products still have high technical barriers and rely on imports. 25G and above optical chips: mainly used in the mobile communication network market and data center market, including 25G, 50G, 100G lasers and detector chips. According to LightCounting and industry data, the global market size of 25G and above optical chips in 2021 is 10.755 billion yuan. According to ICC statistics, the localization rate of 25G optical chips is about 20%, but the localization rate of optical chips above 25G is still about 5% lower.
Automotive LiDAR Applications
Yole predicts that the automotive ADAS lidar market will experience rapid growth in the next five years, with an annual compound growth rate of 73%. By 2027, the ADAS lidar market size will increase from $38 million in 2021 to $2 billion in 2027, becoming the largest application field in the lidar industry. At the same time, the unmanned taxi market will also grow at a compound annual growth rate of 28%, and the market size will increase from $120 million in 2021 to $698 million by 2027.
The wavelengths of the laser radar emission light source mainly include 905nm, 1550nm, 1064nm, etc. In 2021, among the publicly produced LiDAR products, 905nm is the preferred wavelength, ranking first with a proportion of 69%, and 1550nm is ranked second with a proportion of 14%. Compared to 905nm, 1550nm has a longer detection distance and higher detection accuracy, and at the same power level, 1550nm products have higher eye safety. The fiber laser used in the 1550nm LiDAR is developed with a seed light source of indium phosphide material system.
Cost analysis and technical barriers of optical chips
Manufacturing cost composition of optical chips
Among the costs, manufacturing costs account for 59%, labor costs account for 24%, and material costs account for 17% (combined statistics of product costs for various rates in Yuanjie in 2021). (1) Manufacturing expenses mainly include depreciation expenses, amortization of decoration expenses, water and electricity expenses, grating processing expenses, and other expenses. (2) The raw materials for optical chips include substrates, gold targets, special gases (mainly including high-purity hydrogen, phosphine, liquid nitrogen, etc.), trimethyl indium, photoresists, packaging materials (including caps, etc.), and other materials. Other raw materials include developer, lithography mask, isopropanol, hydrogen arsenide, and other materials, with a large variety and relatively low proportion of other raw materials. (3) The substrate suppliers include Tongmei, Sumitomo, Yunnan Germanium, etc.
The production process and industrial chain of indium phosphide optical chips
The upstream of the indium phosphide industry chain is the production and processing of crystal growth, substrates, and epitaxial wafers. From the perspective of raw materials and equipment for substrate production, the raw materials include metal indium, red phosphorus, crucibles, etc; The production equipment involves crystal growth furnaces, grinding machines, polishing machines, cutting machines, inspection and testing equipment, etc. The middle reaches of the industrial chain include integrated circuit design, manufacturing, and packaging testing. The downstream applications of the industrial chain mainly involve multiple fields such as optical communication, unmanned driving, artificial intelligence, and wearable devices. Manufacturers in various stages: 1) Substrate manufacturers: Beijing Tongmei, Japan JX, Sumitomo, and a few domestic manufacturers. 2-1) Extension manufacturers: IQE, Taiwan Lianya Optoelectronics, Taiwan New Optoelectronics, Taiwan Interlay, etc. 2-2) Device manufacturers include Finisar, Lumentum, AOI, etc. 3) IDM mode manufacturers: domestic Yuanjie Technology, Shijia Photonics, Changguang Huaxin, etc.
Market and competitive landscape of indium phosphide substrate
According to Yole statistics, the global sales of indium phosphide substrates (equivalent to two inches) for optical module devices are expected to exceed 1 million pieces by 2026, with a compound growth rate of 13.94% from 2019 to 2026. The global market size of indium phosphide substrates for optical module devices is expected to reach 157 million US dollars by 2026. In 2020, the top three global manufacturers accounted for over 90% of the market share in the indium phosphide substrate market, with Sumitomo being the world's largest manufacturer, accounting for 42%; Beijing Tongmei ranks second, accounting for 36%. The preparation methods for compound semiconductor single crystal growth include horizontal Bridgman method (HB), vertical Bridgman method (VB), liquid sealed Clausky method (LEC), and vertical gradient condensation method (VGF). The bulk growth techniques for indium phosphide single crystals mainly include the latter three. Beijing Tongmei and Sumitomo can grow indium phosphide single crystals with a diameter of 6 inches using VGF and VB techniques, respectively. Japan JX can grow indium phosphide single crystals with a diameter of 4 inches using LEC technology.