- Hyperscalers are exploring Optical Circuit Switching (OCS) as an alternative to packet-based electrical switching
- Google has already proven the tech internally at scale
- Vendors like Omnitron and Lumentum are now racing to win big deployments in what is expected to become a multi-billion-dollar market
Hopeful vendors are jockeying for position as hyperscalers evaluate new data center switching options that could drastically reduce power needs and smash a critical bandwidth bottleneck. The technology they’re placing their bets on? Optical Circuit Switching (OCS).
OCS isn’t necessarily a new technology, but it is having a moment thanks to AI and skyrocketing demand to increase bandwidth between GPUs.
“These GPUs are utilized [at] 25% efficiency. They’re just sitting there waiting for data to come in,” Eric Aguilar, co-founder and CEO of OCS startup Omnitron Sensors, told Fierce. “If you had something smarter, that was able to route the data in a more efficient way, you could crank that efficiency to upwards of 70, 80%.”
Enter OCS. In a nutshell, OCS is an alternative to traditional packet-based electrical switching that establishes direct, light-based pathways to eliminate the need for optical-to-electrical signal conversion. That conversion has become a critical capacity chokepoint in the AI era.
Shifting from electrical packet switching to OCS can not only help increase bandwidth, but also yield power savings of 20% to 40%. Additionally, as Dell’Oro Group pointed out, OCS gear doesn’t need to be upgraded as the industry moves to faster speed tiers since it deals directly in the optical realm.
Google apparently saw the writing on the wall a decade ago, and it spent years developing its own MEMS-based OCS technology. It publicized its progress and learnings from deployments at scale in a pair of research papers published in 2022. China’s Huawei also reportedly uses MEMS-based OCS technology, though less information is available about its implementation.
The thing is, Google isn’t selling its OCS technology. So, companies like Omnitron, Lumentum, Telescent, Coherent and others are jumping on what has become a multi-billion-dollar market opportunity to serve hyperscalers as they grow their data center footprints.
OCS market prospects
Google and Omnitron’s MEMS-based implementations use mirrors to redirect light signals from incoming fibers to new output paths. Omnitron, which was founded in 2019 and has raised $26 million, boasts a 1200 channel solution with 1.5 dB of loss.
But the MEMS approach taken by Google, Omnitron, Lumentum, Calient.AI and others is just one of several different flavors of OCS technology. Others include digital liquid crystal (which is what Coherent offers), robotic (from Telescent), piezoelectric (Huber & Suhner) and silicon photonics (iPronics).
Aguilar told Fierce Omnitron’s solution is currently being evaluated by two trillion-dollar-market-cap hyperscalers. He added it has done a proof of concept for one (for which it expects to receive prototype chips in Q2 or Q3) and expects to do a similar “tape out” for its second partner in the coming weeks.
“They’re moving fast,” he said.
Elsewhere, Lumentum has an OCS order backlog totaling over $400 million, which is spread across multiple customers.
“While our Q2 results and Q3 guidance reflect meaningful contributions from cloud transceivers, we are only just beginning to unlock the massive potential of OCS and CPO,” Lumentum CEO Michael Hurlston said on the company’s recent earnings call. “Our OCS business is exceeding internal expectations. While we originally targeted our first $10 million quarter for fiscal Q3, we cleared that bar three months ahead of schedule.”
Indeed, it seems the market is about to take off. Market research firm Cignal AI has forecast the optical circuit switch market will hit at least $2.5 billion by 2029. Judging from Aguilar’s comments and tens of gigawatts worth of planned data center expansions, the longer-term opportunity could end up being much, much larger.
Aguilar told Fierce that a 1 GW data center containing 1 million GPUs would need around 10,000 OCS switches. And from that scale of deployment, he said Omnitron would expect to generate around $1 billion in revenue.
Given Meta alone is aiming to deploy “tens of gigawatts” in new data center capacity by 2030, you can see where things could be headed for Omnitron and its ilk.