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Silicon Photonics Report Silicon Photonics Report March 2020 Scope of the Report This report looks at Silicon Photonics from a communication and datacom perspective. It is becoming clear that the attributes that make Silicon Photonics compelling for communication/datacom also apply to the sensor market. We will look at the sensor market in a separate report, but our understanding of the market, verified by our visit to Photonics West, is that the sensor market offers a larger market opportunity than datacom for Silicon Photonics. Examples that steer our opinions: 1. Brolis Semiconductor – showing a very compelling medically focused spectrometer that is based on a silicon integrated circuit which is clearly applicable to not only the professional medical market, but also the consumer medical market 2. Other companies such as Rockley Photonics have used their platform technology to demonstrate numerous sensor applications compatible with markets that would demand hundreds of millions of units per annum. Much like their announcements around the commercialisation of their LightDriver™ products it would surprise us if there were not similar announcements focused on the sensor application products they have been developing Silicon Photonics Report – March 2020 Page | 2 RCL Background Mike Powell is the Managing Director and Partner of Renevo Capital Limited. Mike focuses on the TMT and Advanced Materials sectors. He has 15 years experience advising companies internationally on M&A, financing, and corporate strategy. He is extremely well connected across Europe, the North Americas and China. Mike's speciality is photonics and efficiency technologies, and he brings 30 years of senior level experience in leading, advising, managing and negotiating corporate projects and transactions for both private and public companies. Prior to his experience in technology M&A banking and the founding of Renevo Capital Limited, Mike had an extensive history in operational roles within technology businesses, starting as a defence contractor with GEC Marconi. He then entered a period of serial entrepreneurship by founding, funding, growing and ultimately selling three businesses: IOC International PLC, K2 Optronics Inc and Pelikon ltd. He managed IOC as CEO from start-up to its subsequent float on the London AIM stock exchange in 1997 until 2000. He subsequently sold it to NASDAQ quoted SDLI before moving to the Bay area to found K2 Optronics which was later sold to Emcore. In 2002 Mike returned to the UK and joined the founding team of Pelikon as CEO. In 2008 he sold Pelikon to NASDAQ listed MFLEX. Mike has a degree in Physics from Imperial College and is a keen athlete, competing regularly in triathlons. He is also a level 2 qualified Triathlon coach. [email protected] +44 207 929 0248 Silicon Photonics Report – March 2020 Page | 3 Photonics vs. Electronics in Datacom Desire to integrate optics at chip level Solution: Silicon Photonics Current extent of optical usage in network infrastructure Silicon Photonics Report – March 2020 Page | 4 Silicon Photonics Silicon photonics: Using silicon as a waveguide for light at any point in the application Conventional Photonic Characteristic Integrated Integrated Circuits Circuits (PICs) Speed Low High Bandwidth Low High Power Efficiency Low High Size Small Large Availability High Low Critical functions necessary for electronic integrated circuits can be applied in photonic chips Size is the principal limitation for PICs Both traditional ICs and silicon photonic ICs rely on the CMOS manufacturing base, making Silicon Photonics adoption incredibly straightforward Silicon Photonics Report – March 2020 Page | 5 Silicon Photonics Accelerating Network Performance 1 Front Panel Connectors COBO 2 (Consortium for On-Board Optics) Co-packaged optics Progression 3 Co-Packaged Optics The path to Co-Packaged Optics March 2018 – Rockley Photonics Enabled by Silicon Photonics introduces first switching ASIC to directly integrate 100G network ports using single-mode fiber2 ▪ Rise of 25.6-terabit and 51.2-terabit switch chips will bring with it the dawn of co- packaged optics1 ▪ Co-packaged optics will first be deployed alongside pluggables, enabling the March 2020 – Intel integrates silicon photonics engine with 3 hyperscalers to deploy both technologies in their data centres reducing supply Ethernet switch constraint and reliability risk1 • Successfully demonstrated a new co-packaged switch optimised for ▪ They will therefore need to interoperate with conventional front-end pluggable hyperscale data centres optics1 • Demonstration used a P4-programmable Barefoot Tofino 2 switch ASIC ▪ Cost and power optimisation will be the main reasons for moving to co-packaged (12.8Tbps) co-packaged with Intel's 1.6Tbps silicon photonics engines • This is the first step to making optical I/O with silicon photonics a reality 1 optics – a chance for companies to show-off innovation Announcements by Intel in the co-packaged space underscores the ▪ Some switch chip vendors have already started separating the SerDes input-output growing sentiment to move toward co-packaged optics (I/O) – making the switch from electrical I/O to optical I/O possible 1 Source: 1 Gazettabyte, 2 Hexus, 3 eeNews Europe Silicon Photonics Report – March 2020 Page | 6 Silicon Photonics Market Growth Rates by Region Regional Growth Rates High Medium Low Source: Mordor Intelligence Silicon Photonics Report – March 2020 Page | 7 Silicon Photonics Market Drivers Silicon Photonics Market Forecast, 2018- Inhibitors 2025 ($bn)1 Manufacturability Manufacturability 3.0 Standard silicon wafer processing Currently all photonic integrated techniques results in commercial 2.5 chips are larger than their viability of silicon photonics 2.1 electronic counterparts. This is a compared to alternative PIC 1.7 large barrier to implementation in 1.4 materials 1.2 many systems. 1.0 0.8 Performance Functionality Other types of photonic integrated Consumer data usage rise chips have shown better (heightened with 5G rollout) 2018 2019 2020 2021 2022 2023 2024 2025 functionality: Indium Phosphide creating demand for better for instance has demonstrated performance across network ability to be used as an optical architecture: higher processing Sample Applications amplifier. An area which silicon speeds and greater bandwidth photonics has not surpassed. Augmented Reality New Opportunities Volume The high immediate cost of Novel applications such as Lasers replacing network systems with Augmented Reality Glasses and photonics infrastructure limits silicon inter-chip interconnects are uptake and numbs the cost based on silicon waveguides advantage that silicon photonics Interconnects presents when deployed in mass scale Source: 1 Markets and Markets Silicon Photonics Report – March 2020 Page | 8 Representative Photonics Ecosystem Hyperscale System Vendors Optics/Chip Companies Optics Fabs Packaging Vendors Foundries Photonics Automated Assembly Design R&D Design Centers Source: SemiconductorTODAY, company websites Silicon Photonics Report – March 2020 Page | 9 Silicon Photonics-Specific Investment 2010-2015 Rise in Silicon Photonics investment was onset from realisation of limits of electronics, creating a need for an alternative. 2015-2018 Lowered interest – due to reduced activity from network-level players 2018-present Resurgence in investment as move to photonics begins Source: Crunchbase – see transactions below Silicon Photonics Report – March 2020 Page | 10 Silicon Photonics Investments – 1 of 3 Funding Date Company Founded Headquarters Description Investment Value ($m) Feb-2020 Sicoya 2015 Berlin, Germany Optical transceiver chips for server interconnects 1.5 Jan-2020 Xanadu 2016 Toronto, Canada Photonic quantum computing: integrates and designs quantum silicon photonic chips 4.4 Oct-2019 Ranovus 2012 Ottawa, Canada Interconnect solutions for data center and communications networks 24.0 Sep-2019 Scintil Photonics 2018 Grenoble, France Fabless silicon photonic integrated circuits developer 4.4 Jul-2019 Rockley Photonics 2013 Pasadena, United States Manufactures photonics chips and custom integrated packaged products 52.0 Jun-2019 Xanadu 2016 Toronto, Canada Photonic quantum computing: integrates and designs quantum silicon photonic chips 24.3 Jun-2019 Cosemitech 2014 Shanghai, China Semiconductor Solution Provider 1.4 Feb-2019 Lightmatter 2017 Boston, United States AI hardware using integrated optical technology 22.0 Nov-2018 Ranovus 2012 Ottawa, Canada Interconnect solutions for data center and communications networks 20.0 Nov-2018 Ayar Labs 2015 Emeryville, United States Technology to miniaturise fiber optic transceivers 24 Oct-2018 Ranovus 2012 Ottawa, Canada Interconnect solutions for data center and communications networks 8.0 May-2018 Xanadu 2016 Toronto, Canada Photonic quantum computing: integrates and designs quantum silicon photonic chips 6.8 Mar-2018 Rockley Photonics 2013 Pasadena, United States Manufactures photonics chips and custom integrated packaged products 40.0 Feb-2018 Pilot Photonics 2011 Dublin, Ireland Develops comb source laser technology for the communications, space, and industrial markets 1.2 Feb-2018 Lightmatter 2017 Boston, United States AI hardware using integrated optical technology 11.0 Source: Crunchbase Silicon Photonics Report – March 2020 Page | 11 Silicon Photonics Investments – 2 of 3 Funding Date Company Founded Headquarters Description Investment Value ($m) Dec-2017 Axalume 2017 La Jolla, United States Developed technologies that combine silicon photonic circuits
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