PAM4 vs. NRZ: What You Need to Know


So you’ve been thinking about PAM4 vs NRZ and want to know how these two vary and how PAM4 will effect the optical communication industry.  For starters, Pulse Amplitude Modulation 4-level, abbreviated as PAM4, was already recognized by microwave link technicians around the turn of the century. Modern microwaves, for example, employ substantially greater modulations, even up to 1024QAM. PAM4 is, in our opinion, just the beginning of signal modulation applications in the optical industry. We anticipate that, like in the microwave business, greater and higher modulation techniques will be implemented in optical communications. PAM16 would be the next in line.

PAM4 allows to double the amount of transmitted information in the same baud rate

To put it simply, PAM4 has a significant advantage over NRZ in terms of data transfer capacity. In the same baud rate, PAM4 doubles the quantity of information that may be conveyed. In other words, if NRZ can send one bit per baud unit, PAM4 can broadcast two bits per unit. The term comes from the fact that the signals may be modulated to four distinct amplitudes.

SNR (Signal-Noise Ratio), on the other hand, drops as distance increases. It is most observable with PAM4 modulation. A greater SNR value is required for higher power levels. As a result, PAM4 modulation is currently more applied for short distance connections. Transceivers that are based on PAM4 technology require more accurate, synchronized, and equalized Tx/Rx components. For example – DSP (Digital Signal Processor) improves Tx/Rx component performance by synchronizing and equalizing signals. That’s why PAM4 transceivers such as QSFP56, QSFPDD nowadays are more costly than previous generation NRZ-based transceivers.

To summarize, PAM4 vs NRZ – PAM4 in the optical industry is still a new technology, which has to mature. But as with any new technology, it will become a common occurrence and will be much more accessible and suitable for the desired solutions. Finally, visit our more detailed explanation of PAM4 here: 100G Single Lambda (100G PAM & Single Lambda).