Today on its Q3 2023 earnings call, Intel announced that it divested its optical module business. That is really interesting as we know that the company was shipping silicon photonics pluggable modules for years.
Update 2023-10-31 Jabil Buys the Intel Pluggable Silicon Photonics Business
[Editor’s note: As I am editing this, I have one on my desk.]
Intel Divests Its Pluggable Optical Module Business
For those who do not know this, Intel has been selling silicon photonics-based optical transceivers for years. At Intel Interconnect Day 2019, the same event where Intel went into CXL for the first time in-person, the company showed off its 100Gbps and even a 400Gbps silicon photonics optical transceiver.
The idea here was that the silicon photonics pluggable would be more reliable and easier to scale for higher-end switches. It took until this year for STH to review a 64-port 400GbE switch, but the industry has been using them for years.
Intel has sold millions of silicon photonics pluggable optical modules to customers over the years. Facebook, now Meta, has historically been a well-known customer in the industry for the modules.
Intel previously has said that its large customers (presumably Facebook/ Meta) had seen significantly lower AFRs on the photonics modules. In hyper-scale, the reliability of optical modules is a huge point of focus.
Intel was also fairly early with pluggable optics for 400Gbps networking which was a big deal.
Final Words
Intel mentioned divesting the business in passing in its earnings call but did not mention more details. Still, as Intel previously announced in its Intel Q4 2022 earnings call it was winding down its network switch business that it purchased with Barefoot (and Fulcrum before that.) We know silicon photonics co-packaged is going to happen in the industry, perhaps using external pluggable light sources. Perhaps Intel sees a more crowded market with folks like Marvell stepping up its modules. It feels like this is another business that generated hundreds of millions in revenue for Intel that is being divested.
One theme of Intel earnings announcements recently has been a string of now a double-digit number of businesses that Intel has rationalized away.
