Latency gets thrown around a lot in networking conversations, but it's worth being precise about what it actually means and why, in certain contexts, it deserves to be at the top of your design criteria rather than buried in the footnotes.
The basics
At its simplest, latency is the time it takes for a signal to travel from point A to point B. In the context of optical transceivers, that means the time elapsed from the transmitter input to the receiver output. Lower latency means faster communication — and in some applications, that difference is measured in nanoseconds that genuinely matter.
Why it matters — and for whom
For most applications, latency is a background consideration. If you're transferring large files or streaming data continuously, a few extra nanoseconds won't change your world. But for certain use cases, latency isn't just a spec line — it's a competitive variable.
High-performance computing, supercomputing clusters, financial trading platforms, and real-time gaming are the obvious examples. In algorithmic trading, a time delay of even a fraction of a millisecond can affect the outcome of a transaction. In HPC environments running complex simulations or neural network workloads, latency is one of the few variables you can actually optimize — fiber path delay is fixed by physics, but the latency introduced by your interconnects is not. Low-latency interconnects are a core part of InfiniBand architecture for exactly this reason.
The physics of it
Light in free space travels at roughly 3×10⁸ m/s, which translates to about 3.34 microseconds of latency per kilometer. Inside an optical fiber, it moves more slowly. For a single-mode fiber with a refractive index of 1.4682, that works out to approximately 5 nanoseconds per meter, or 4.9 microseconds per kilometer.
For context: one nanosecond is roughly one billionth of a second — 10⁻⁹ seconds.
Latency is additive — and that adds up
Here's something that's easy to underestimate. In a system with many components — switches, transceivers, cables, network interfaces — each one contributes its own latency, and those contributions stack. A 100 nanosecond latency here, a bit more there, and suddenly you're looking at 150ns or more across the full signal path. When you're running high volumes of transactional queries through an HPC cluster or a trading system, that accumulation has real consequences. You need to account for the latency of every pluggable in the chain, not just the network infrastructure around it.
How cable design affects latency
The physical construction of a cable plays a direct role. Copper cables actually have lower inherent latency than pure fiber — but they come with significant trade-offs: limited reach, heavier weight, less flexibility, and susceptibility to electromagnetic interference. For short runs where latency is the primary driver, copper has advantages. For anything else, fiber is the right answer, and the question becomes which fiber-based architecture minimizes latency most effectively.
Where the real gains are being made
The biggest shift in optical interconnect latency in recent years has come from rethinking the signal processing architecture inside the cable itself.
Current 400G QSFP-DD AOCs typically use a 7nm DSP as the gearbox and retimer for PAM4 signal processing — everything happens in the digital domain. DSP-based AOCs introduce around 120 nanoseconds of latency as a result.
Nexgen's analog CDR-based AOCs take a fundamentally different approach. Working with the Open Eye Consortium, we replaced the DSP architecture with analog Clock and Data Recovery devices. The result is dramatic: latency drops to just 20 nanoseconds — a 100ns improvement over conventional DSP-based solutions — along with meaningful reductions in power consumption and cost, and a simpler manufacturing process.
For applications where every nanosecond counts, that's not a marginal improvement. It's a different category of product.
On the copper side, Active Electrical Cables offer another compelling option for ultra-short runs. AECs are a hybrid copper-fiber design that overcomes the weight and flexibility penalties of traditional copper cables while delivering latency of just 4 nanoseconds at 400G — the lowest of any active interconnect option currently available.
The bottom line
If your infrastructure handles sustained bulk data transfer, latency probably isn't your primary concern. But if you're running HPC workloads, financial trading systems, real-time gaming infrastructure, or any application that depends on rapid transactional responses, it should be near the top of your specification list — and you should be accounting for every component in the signal path, not just the obvious ones.
Nexgen's engineering team has spent nearly two decades working with fiber optic solutions across these environments. If you're trying to figure out where latency is costing you performance and what to do about it, we're happy to work through it with you.