Operation performance of a 40 Gbps, 2-bit Optical Digital-to-Analog converter (ODAC) and its application to optical label switching systems have been investigated. The device is composed of a 1$\,\times\,$2 multi-mode interference (MMI) splitter, one-bit-delay line, and a 2$\,\times\,$1 MMI combiner. It has a high-mesa structure fabricated on InP-based materials. Dependence of output signal level on input signal wavelength and device temperature was measured. Due to the optical phase variation caused by the refractive index change with wavelength and temperature, output signal level varied, and it agreed well with simulation results. Four-level signals were generated and a quarter dependence of phase on temperature and wavelength compared with that for 10-Gbit/s was verified. Next, operation tolerance of the ODAC as an optical label processor, bit error rate (BER) of the digital-to-analog (DA)-converted signal was simulated. The tolerance against fluctuation of light source power, optical phase in the device, optical chirp, and extinction ratio of input signal was estimated. For all parameters, operation tolerance could be kept, but that for 40 Gbps is smaller than that for 10 Gbps. Then, autonomous label processing and optical label switching performance using a gate pulse generation scheme based on phase-shifted preamble was investigated. Optical DA conversion and three kinds of optical label were recognized at a bit rate of 40 Gbps, and optical packet transfer could be confirmed.
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