AI/ML to Drive Significant Networking Bandwidth Growth in 2H23 and into 2024

112 Gbps SERDES and 800G to the Server to Help Propel AI/ML Growth

During DesignCon 2023, many demos highlighted the 800G ecosystem. Specifically, 112G SERDES-based products will help drive 800G and higher links to the server. Our forecasts in servers indicate that most unit growth over the next five years will come from AI/ML-based servers.

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Why is there such a sudden and robust demand for higher-speed connectivity? Several technologies have come together at the same time AI/ML is becoming critical to digitization efforts. First, the industry was stuck on PCIe Gen 3 for nearly a decade. Most current announcements use PCIe Gen 5, significantly increasing the bus speed. Second, new AI, x86, ARM, and customer accelerator processors continue to increase core count. Third, servers continue to get multiple accelerators per server, and most designs focus on purpose-built hardware for specific workloads. Finally, 112G SERDES allows for a clean upgrade to by eight (x8) architectures and 800G. 8x56G and 400G flow nicely into 8x112G and 800G designs.

The confluence of the above technologies and AI moving from niche to the mainstream will cause bandwidth growth in AI to exceed a 100% CAGR over the next 3 years. Coming out of DesignCon and looking towards OFC in March, we will have 800G momentum to continue with different demos, interoperability, and product announcements. We see these server designs directly and hinted at in hyperscaler announcements. Microsoft’s investment in ChatGPT and Google’s rushed announcement of Bard show a new multi-billion wave of investment in new computing platforms.

Active copper cables (ACCs) will play an essential role in making these AI clusters achieve the performance and power efficiencies needed. Active copper helps solve the issue of DAC no longer having the required reach on higher-speed links, not to mention the bulky nature of the cable. In addition, they allow customers to continue with copper and not have to adopt fiber directly to the server. Fiber to the server also brings up a more considerable change in architectures and conversations of replacing the Top-of-Rack switch.

In terms of timing, we expect these next-generation servers and networking platforms to be right around the corner and enter the high-growth part of the ramp in 2H23. This will provide a vital building block for growth in 2024.

By Alan Weckel, Founder and Technology Analyst at 650 Group.