,,This tremendous growth in deployments by a small number of key customers coupled with a large number of suppliers competing for these orders will undoubtedly drive down the cost of 100GE modules rapidly. An industry survey of analysts and vendors indicates that the cost of 100GE transceiver is expected to decline by ~75% in the next couple of years. In the meantime, Facebook has publicly set a target cost of $100 for a 100GE transceiver with a reach of less than 2km. While the Facebook target appears to be years away, we believe that a 70% cost reduction in 2 years is possible and that the only way to get there is by changing the optical transceiver architecture to a PAM4 single lambda configuration."

CWDM4 (Figure 3) as opposed to PSM4, uses an optical multiplexer and de-multiplexer to reduce the number of fibers to 2. CWDM4’s cost is driven by the high component count.