Current performances and future prospects of functional planar lightwave circuits (PLCs) will be described. Channel numbers of AWGs have been dramatically increased up to 400ch in single wafer. In the multi-chip configuration, 1010 ch has been achieved with 10 GHz channel spacing. Although throughput of the transport can be increased to tera-bit level by the WDM technology, signal processing in the electrical layer becomes a serious problem due to its sped limit. Optical functional devices, therefore, are important for solving these issues. Various kinds of optical signal processing devices have been developed; they are, dispersion slope equalizers, PMD equalizers, temporal pulse shapers and optical label recognition circuits. Optical address signal recognition will be a key technology for future label- switched networks, where each router has to provide an ultrahigh throughput exceeding the electronic speed limits. We proposed a novel optical circuit for recognizing an optical pulse pattern, which is based on an optical digital- to-analog converter fabricated on a PLC. The circuit converts the optical pulse pattern to analog optical amplitude, and enables us to recognize the address.