Acacia Communications, Inc. provides high-speed coherent optical interconnect products that transform communications networks relied upon by cloud infrastructure operators and content and communication service providers.
Solution—The Siliconization of Optical Interconnect Technology
The company has developed various families of coherent interconnect modules. Its optical interconnect solution includes modules that perform a majority of the digital signal processing and optical functions require...
Acacia Communications, Inc. provides high-speed coherent optical interconnect products that transform communications networks relied upon by cloud infrastructure operators and content and communication service providers.
Solution—The Siliconization of Optical Interconnect Technology
The company has developed various families of coherent interconnect modules. Its optical interconnect solution includes modules that perform a majority of the digital signal processing and optical functions required to process network traffic at transmission speeds of 100 gigabits per second (Gbps) and above in long-haul, metro and inter-data center networks.
The company’s optical interconnect products are powered by its internally developed and purpose-built coherent digital signal processor application-specific integrated circuits (DSP ASICs) and/or silicon photonic integrated circuits (PICs) (silicon PICs). Its coherent DSP ASICs and silicon PICs are engineered to work together, and each integrates various signal processing and optical functions that together deliver coherent optical interconnect solution in a small footprint that requires low power and provides significant automation and management capabilities.
Strategy
The key elements of the company’s strategy are to continue to innovate and extend its technology leadership; increase penetration within its existing customer base; continue to expand customer base; grow into adjacent markets; and selectively pursue investments, acquisitions or other strategic transactions.
Products
The company’s products fall into three product groups: embedded modules, pluggable modules and semiconductors. Its optical interconnect technology products consist of families of optical interconnect modules that are rooted in its coherent DSP ASIC and silicon PIC components. Its embedded module and pluggable module product groups consist of optical interconnect modules with transmission speeds ranging from 100 to 1,200 Gbps per module for use in long-haul, metro and inter-data center markets. The company’s module products incorporate its proprietary advanced system-in-a-module software. Its semiconductor product group consists of its low-power coherent DSP ASICs and its silicon PICs, which are either integrated into its embedded and pluggable modules or sold to customers on a standalone basis for integration into internally developed or other merchant modules. The company has developed and manufacture, sell and support various coherent interconnect modules and components across three product groups:
Embedded Modules
AC1200 Flex Product Family
The company’s AC1200 product family, ramping in production, utilizes two wavelengths, with approximately 600 Gbps capacity each, and supports transmission capacity of approximately 1,200 Gbps. Its AC1200 module is software configurable to optimize transmission speeds, fiber capacity, compensation for signal impairment and power consumption for multiple network applications, including inter-data center, metro, long-haul and submarine.
AC400 Flex Product Family
The company’s AC400 Flex product family supports transmission capacities ranging from 100 to 400 Gbps per module in a 5 inches x 7 inches form factor. Modules in its AC400 Flex product family are software configurable to optimize transmission speeds, fiber capacity, compensation for signal impairment and power consumption for multiple network applications, including inter-data center, metro, long-haul and submarine, spanning transmission distances up to 12,000 km and greater. The company is also developing a 400ZR module that would expand its pluggable module product group, and enables inter-data center transmission capacity of 400 Gbps in the same compact pluggable form factors used for 400G client optics, including QSFP-DD and OSFP.
Pluggable Modules
CFP2-DCO Product Family
The company’s CFP2-DCO product family supports approximately 200 Gbps transmission speeds, using QPSK, 8QAM and 16QAM modulation, over distances of approximately 2,500 km in CFP2 form factor. The module supports interoperable staircase FEC, as well as Acacia proprietary soft decision FEC, and is mainly used in inter-data center, metro and long-haul network applications.
CFP2-ACO Product Family
The company’s CFP2-ACO product family supports transmission speeds of approximately 200 Gbps over distances of approximately 2,500 km using CFP2 pluggable form factor that was designed in accordance with the Implementation Agreement defined by the Optical Internetworking Forum. Its CFP2-ACO offers an optics-only solution for customers who relies on in-house DSP capabilities.
AC100-CFP Product Family
The company’s AC100-CFP product family supports 100 Gbps transmission speeds over distances of approximately 2,500 km in a pluggable CFP form factor. The modules in the company’s AC100-CFP product family utilize its internally developed silicon PIC technology and are mainly used in metro, inter-data center and long-haul network applications.
Semiconductors
DSP ASICs
The company’s coherent DSP ASICs incorporate its proprietary signal processing algorithms to meet the power and performance requirements of the inter-data center, metro, long-haul and submarine markets. It selectively offers its coherent DSP ASIC as a component to customers designing their own coherent modules and line-cards. The company’s coherent DSP ASICs and silicon PICs are manufactured using complementary metal oxide semiconductor (CMOS). Its use of CMOS also enables it to use outsourced foundry services rather than requiring custom fabrication to manufacture its products.
Silicon PICs
The company’s coherent silicon PICs incorporate multiple coherent optical functions, such as transmission and reception, in a single package. The high level of integration in its silicon PICs enables high density designs of coherent modules and linecards. The company is working with various client optics vendors that are interested in leveraging its silicon PIC technology in non-coherent 400 Gbps applications that use PAM4 modulation and direct detection.
Sales and Marketing
The company markets and sells its products through a direct sales force consisting of sales personnel and centralized and field-based technical customer support and might in the future market and sell its products through third-party distributors. Its sales force also works closely with its product line management personnel to support strategic sales activities.
The company sells its products through a direct sales force to network equipment manufacturers, network operators and cloud service providers. The company provides its customers with field-based technical support and centralized technical support. Its field-based technical support is provided on site from its offices in China, Europe and San Jose, California, and its centralized technical support is primarily housed within its corporate headquarters in Maynard, Massachusetts.
Customers
In 2019, ZTE Kangxun Telecom Co. Ltd., accounted for 27% of the company’s revenue, Cisco Systems, Inc. and its affiliates, accounted for 17% of its revenue, Infinera Corporation, accounted for 17% of its revenue and ADVA Optical Networking North America, Inc., accounted for 13% of its revenue.
Research and Development
The company incurred research and development expenses of $128.7 million during the year ended December 31, 2019.
Intellectual Property
As of December 31, 2019, the company had 76 patents granted in the United States and seven patents granted in foreign jurisdictions, which expire between 2027 and 2039. It also had 73 patent applications pending in the United States, and 24 pending foreign patent applications.
Competition
The company’s principal competitors in its product lines or markets include II-VI, Fujitsu Optical Components, Inphi, Lumentum Holdings, NEL, Neophotonics and Sumitomo Electric Industries. It also competes with internally developed coherent interconnect solutions of certain network equipment manufacturers, including Ciena, Huawei Technologies Co. Ltd., and Nokia.
Government Regulation
The company’s products and services are subject to export controls, including the U.S. Department of Commerce’s Export Administration Regulations and economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls, and similar laws and regulations that apply in other jurisdictions in which it distributes or sells its products and services. The company is also subject to various domestic and international anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, as well as other similar anti-bribery and anti-kickback laws and regulations.
History
Acacia Communications, Inc. was founded in 2009. The company was incorporated in the state of Delaware in 2009.
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