It's not accurate to describe the current situation “an exodus,” but the fact remains that the top layer of Socionext's people have already peeled off.
Socionext's network SoC unit, with teams in the UK, Germany and the U.S., including a group that designs SerDes for servers, has more than 100 members.
It wouldn’t be accurate, however, to describe the current situation “an exodus,” as one source cautioned. “There are good many technical people—doing testing and evaluation—still there.” But the fact remains that the top layer of people who contributed to the making of the business unit have already peeled off.
According to Linkedin profiles, among those left include Ian Dedic and Markus Weber. Dedic was the technical brain behind the UK design team, while Weber was marketing director of Socionext’s SoC business unit.
Weber left earlier this year and joined Acacia in March this year. He is currently senior director PLM at Acacia. Dedic resigned in July. Both declined to be interviewed by EE Times.
Optical networking market
Several industry sources confirmed that Acacia was once a customer of Socionext.
Jimmy Yu, vice president of Dell’Oro Group, explained that Acacia is a supplier of DSP and pluggable optics such as CFP (C form-factor pluggable)-DCO (Digital Coherent Optics) and CFP2-ACO (Analog Coherent Optics). Hence, they supply to the optical network equipment vendors.
Yu pinned Acacia’s strength on “having both silicon photonics and DSP know-how.” He noted, “I believe these core competencies allowed Acacia to lead in the development of CFP-DCO and CFP2-ACO pluggable optics. Both form factors required advanced technology to reduce power consumption and size of both DSPs and photonics to fit in such small form factors.”
Figure 2: (Source: IHS)
Due to its Q2 earnings call scheduled next week, Acacia is in a quiet period. The company has not said anything about all that Socionext talent coming over. But it’s likely that Acacia will leverage it silicon photonics technology, and co-design its photonics with ADC and ASIC (knowledge coming from ex-Socionext guys) in order to design solutions that are lower power and lower cost.
According to Dell’Oro Group, the DWDM Long Haul market was $4.7 billion in 2015. It is expected to grow 8% this year.
Dell’Oro Group’s Yu noted that data-centre-to-data-centre is one of the high uses for DWDM long-haul equipment. Among network equipment vendors with sizeable market share in DWDM Long Haul in 2015 are Huawei (28%), Ciena (16%), Infinera (15%), and Nokia formerly Alcatel-Lucent (14%).
Yu added that Acacia supplies more to the WDM Metro market than to the DWDM Long Haul market. The WDM Metro market was $5.6 billion in 2015 and is expected to grow 9% in 2016.
Socionext’s next move
In hindsight, Socionext could have spun off and sold its UK design team a year ago when the company was created. “It would have been a logical choice,” one source told EE Times. But for whatever reasons, especially with the Development Bank of Japan’s interest in the business, there’s been no sale.
Considering that Socionext’s estimated revenue is 150 billion yen ($1.4 billion) this year, the Network SoC business, earning about $150 million, isn’t a huge portion.
But that market is still growing and its products are unique in the market, when compared with Socionext’s other ASICs, including HEVC codec and graphic chips.
Industry observers believe that keeping its huge workforce and maintaining its equally large product portfolio won’t be sustainable for Socionext.
The motive for members of the Networking SoC business unit to reconsider their future with Socionext is apparently the feeling that they were being asked to hold the bag for the rest of the company, while getting little reward for what they believe are truly differentiated technologies.
Socionext declined to comment on this story.