Broadcom pushed the optical channel up to 64G

Broadcom's Emulex division announced the launch of the next generation of Fiber Channel memory cards and chips, aiming to drive the market to a higher speed. Emulex is bullish on the prospects of its 64Gbit/s products, although at least one market research organization believes the overall market is stabilizing.

 Emulex LPe35000 cards and XE601 controllers are now on the market, but the 64G optical modules they need are just beginning to deliver samples, while PCIe Gen 4 connections are not yet universal on X86 servers. "By the end of 2019 or early 2020, we will be able to see mass shipments of these products," said Jeff Hoogenboom, general manager of Bloom Emulex.

 Ethernet has been expanding its application in computer networks, but with the rise of solid-state hard disk (SSD) arrays, optical fiber channels have recently become popular.

Hoogenboom said, "We believe that with the widespread deployment of SSDs with NVMe interfaces, another wave will come," and pointed out that the new card can achieve delay performance similar to that of ethernet. "The new requirements will also increase dramatically, as bottlenecks will change with NVMe."

Seamus Crehan, an analyst at Crehan Research, is less optimistic. As he said in an e-mail interview, he expects Fiber Channel Card sales to grow by only about 5% in 2018, as the market seems to be recovering. Thereafter, I expect future market sales to remain stable. "

 To some extent, by actively promoting the next generation of products, Emulex hopes to gain more market share in Fiber Channel from its only competitor, QLogic (now part of Marvell). So far, Dell EMC has indicated that it will provide Emulex Gen 7 Fiber Channel Card and Controller on its PowerEdge server.

"Full flash arrays now account for almost 70% of the market, compared with only 50% in China, and this year there will be a major shift in the Chinese market," Hoogenboom said.

 "In the past two quarters, our 16G share in China has risen from less than 30% to more than 60%, and 16G meets the requirements of full flash system," he added. "Therefore, by the end of 2019, most of the new storage systems should adopt solid-state drives."

 Analyst Crehan predicts that by 2020, 32G and higher fibre channel cards will account for more than half of the total sales in the fibre channel market.Latest Chip and Corporate Financial Analysis

The round trip delay of 32G/64G Emulex products is less than 10 microseconds, which can reach the speed of 5 million I/O operations/seconds (IOPS). Compared with the previous generation of 16G/32G products, the performance of the former generation of products using PCIe Gen 3 bus, speed of 1.6 million IOPS, delay of 30 microseconds.

 The latest Emulex chip uses the same 16-nm process and dual-threaded Arm 968 core as the previous generation. But the new chip is optimized to have faster data path and new software driver, which can achieve faster speed, allow wireless (OTA) upgrade, and simplify the work of isolating and repairing network failures.

 After a wave of consolidation, there are now only four companies in the fibre channel market, two card manufacturers and two switch suppliers. Avago acquired Emulex in 2015 before merging with Bloom. A year later, Cavium acquired rival QLogic and merged with Marvell last year. Brocade, acquired by Broadcom in 2016, offers system-level fibre channel switches to compete with Cisco switches.

Broadcom is in a favorable position in the cable network market, regardless of Ethernet or optical channel. Overall, after the release of the latest quarterly report, analysts were optimistic about the company's diversified portfolio.

 "Broadcom is our preferred stock in 2019, and we believe that [acquisition] CA Technologies has brought some special elements to the company to boost performance, including revenue growth, profit expansion and higher dividends," commented Mit Shah of Nomura Securities.

 Nomura Securities upgraded its valuation and maintained its buying rating after Broadcom announced higher-than-expected earnings and profits. Broadcom said it expects revenue to grow to $24.5 billion in fiscal year 2019, of which $19.5 billion will come from chips and about $5 billion from infrastructure software.

 Although its wireless business has declined due to the decline in Apple's share of the iPhone, Broadcom's cable portfolio is competitive in the target market and will gain a larger share, [we] expect the healthy and sustained growth of the business to drive the overall growth of the company,'Canaccord Genuity analyst Michael Walkley wrote in a report. "In fact, the median growth target for its semiconductor business is higher than our expected growth rate of 3%.