Benefiting from the rapid growth of global computing power demand, the demand for high-speed optical modules is strong. With the rapid development of AI servers, it is expected that by 2026, optical modules for data communication will occupy 60% of the market share.
The arms race for large AI models continues, and major overseas manufacturers have clearly stated in their 2024 guidelines that they will increase investment in optical communication-related construction such as IDC, cloud services, and AI infrastructure.
A number of major tech giants, such as Google, Microsoft and Meta, have significantly ramped up their future capex plans, creating clear growth expectations across the value chain. This has also greatly promoted the growth of demand for high-speed optical modules such as 800G, and major high-speed optical module manufacturers are also actively promoting the next generation of optical high-speed optical module products such as 1.6T, and the demand for 1.6T optical modules is expected to exceed expectations next year.
NVIDIA's latest chip GB200 has strong demand, and the deployment and operation of large-scale clusters require high-speed and stable optical communication networks to support, and 1.6T optical modules are the key components to build such networks. The agency expects that 1.6T optical modules are expected to achieve shipments of more than 5 million next year, and there is room for further growth in the future.
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NVIDIA expects that the demand for higher 1.6T optical modules from 2024H2 will now bring new growth:
Source: Nvidia
NVIDIA's latest generation product, GB200, is a new benchmark for high-performance computing and is leading a new trend in AI training. Clusters of more than 576 cards are expected to be the primary shipment configuration to meet the demand for massively parallel computing.
NVIDIA NVL576两排机柜实物图：
FiberMall predicts that with the continuous growth of network demand, the demand for 1.6T optical modules is expected to be realized by 2025, and the speed of optical modules will also increase to match the growth of switches. It is expected that by 2025, when the rate of switches reaches 102.4 Tbit/s, the demand for 1.6 Tbit/s optical modules is also expected to be realized.
1.6T optical module industry chain and competition pattern
From the perspective of the industrial chain, the upstream of optical modules is mainly composed of optical chip manufacturers and optical device suppliers, and the midstream is the packaging of optical modules and the manufacture of optical communication equipment, and optical modules are assembled from optical chips and optical devices, and then inserted or embedded in optical communication equipment for external connection of equipment, and the downstream of the industrial chain is mainly the digital communication market and the telecommunications market, including Internet and cloud computing enterprises, telecom operators and other end users.
The demand for AI in the digital communication market has grown rapidly in the past few years, and it has become the focus of attention in the entire optical communication industry chain.
Diagram of optical module industry chain:
From the perspective of the global market pattern of optical modules, among the top ten optical module companies in the world, Chinese mainland occupies five, showing China's global leading position in optical module packaging capabilities.
According to Zhongji InnoLight, since the mass production of 800G optical modules began in the second quarter of 2023, its orders and shipments have achieved quarter-on-quarter growth every quarter. At the same time, the supply of core raw materials such as DSP and EML has been eased to varying degrees in the third and fourth quarters.
Zhongji InnoLight is a leading enterprise in the global optical module industry, and the company's products cover medium and low, high-speed optical modules and optical components. In recent years, the 800G optical module business has grown steadily, and at the same time, it has also made leading progress in the research and development of 1.6T optical modules, and the company's 1.6T optical module products are expected to be introduced by key customers in the second half of 2024.
At the OFC2024, Tianfu Communication focused on the optical engine products and solutions supporting 1.6T/800G optical modules, and Xinyisheng focuses on the R&D and production of point-to-point optical modules, and is one of the few manufacturers in China with 800G batch delivery capabilities. At present, the project of 1.6T related optical module products is progressing smoothly, Cambridge Technology also said that it is expected to achieve small batch delivery of 1.6T optical modules in the second half of 2024, and Accelink Technology and Huagong Technology also have relevant layouts. #光通信##光模块##人工智能##算力##服务器##科技##财经#
800G/1.6T optical module partial layout manufacturers:
Source: iFinD, Wind, Accelink
epilogue
At present, global data traffic continues to explode, with AI technology giants such as NVIDIA leading the industry to innovate and iterate, and the continuous prosperity of AI computing power and large models will also drive the development of optical modules in the direction of higher speeds, and the industry is expected to usher in accelerated upward opportunities.
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