  We present the development of a second generation digital readout system for
photon counting microwave kinetic inductance detector (MKID) arrays operating
in the optical and near-IR wavelength bands. Our system retains much of the
core signal processing architecture from the first generation system, but with
a significantly higher bandwidth, enabling readout of kilopixel MKID arrays.
Each set of readout boards is capable of reading out 1024 MKID pixels
multiplexed over 2 GHz of bandwidth; two such units can be placed in parallel
to read out a full 2048 pixel microwave feedline over a 4 -- 8 GHz band. As in
the first generation readout, our system is capable of identifying, analyzing,
and recording photon detection events in real time with a time resolution of
order a few microseconds. Here, we describe the hardware and firmware, and
present an analysis of the noise properties of the system. We also present a
novel algorithm for efficiently suppressing IQ mixer sidebands to below -30
dBc.
