I. Surging Demand: AI Computing Power Race Drives Explosive Growth in Optical Module Market Size

(1). Core Driving Force: Inference Demand Density Exceeds Training Phase

The AI industry has formed a positive cycle of "reduced technology iteration costs → application promotion → explosive growth in inference demand → increased token quantity → accelerated model iteration." According to a report by Huaxi Securities, overseas AI demand (especially from new enterprises) is growing rapidly, and the accelerated growth in token quantity directly drives high investment in AI capital expenditure (Capex). The demand density for optical modules in the inference stage can be 3-5 times that of the training stage, becoming the core engine of industry growth.

(2). Market Size Forecast: Global Demand to Far Exceed Expectations by 2026

√ 800G Optical Modules: Demand is expected to exceed 40 million units, a significant upward revision from earlier forecasts. Among them:

Meta demand has been revised upward from 6 million units to over 10 million units;

Google demand is approximately 5 million (AI Token processing volume doubled month-over-month).

Amazon demand reached 5.5 million units (self-developed ASICs drove the ratio to 1:8).

√ 1.6T Optical Modules: Demand is expected to reach 8.6 million units in 2026. NVIDIA is performing exceptionally well, with demand reaching 2.5-3.5 million units in 2025 (accounting for 80% of the global market share), and increasing to more than 5 million units in 2026.

Accelerated Technological Iteration: The optical module market is undergoing rapid iteration from "400G → 800G → 1.6T", with the cycle continuously shortening.

(3). Regional Market Differentiation: China and the US Lead, Middle East Emerges as New Growth Engine

1). North America: Shipments of 400G/800G optical modules exceeded 20 million units in 2024 (a fourfold increase year-on-year). The combined capital expenditure of the four major cloud vendors, Google, Microsoft, Meta, and Amazon, is expected to increase by 50% year-on-year in 2025, reaching $333.8 billion.

2). China: The market size was US$2.65 billion in 2024 and may reach US$6.5 billion in 2029 (CAGR 20%), benefiting from the "East Data West Computing" policy.

3). Middle East: Saudi Arabia Humain project purchased 18,000 NVIDIA GB300 chips (accounting for 12% of global Q1 shipments), catalyzing demand for 1.6T chips in 2026.

II. Technological Innovation: Silicon Photonics, LPO, and CPO Drive Industry Direction

(1). Silicon Photonics Technology: Mainstream Choice for High-Speed Optical Modules

A. Advantages: Low power consumption, low cost, and high integration make it a core direction for high-speed optical modules.

B. Market Penetration: The penetration rate of silicon photonics modules in 800G and 1.6T continues to climb, and it will dominate the high-speed market after 2026. Huawei released the world's first single-wavelength 1.6Tbps silicon photonics module, which reduces volume by 70% and power consumption by 40%; InnoLight Technology's 800G silicon photonics module market share has reached the world's number one (approximately 50%).

(2). LPO Technology: Reduces Power Consumption, Enhances Performance, Secures Leading Orders

A. Technological Breakthrough: By eliminating the DSP chip, both power consumption and performance are optimized. The new Eoptolink 800G LPO module reduces power consumption by 50% and has already secured orders from leading clients such as Meta and Amazon.

B. Market Outlook: LPO module revenue is expected to account for 15%, becoming an important growth driver.

(3). CPO Technology: Frontier Exploration, Scalable Application Still Requires Time

A. Technological advantages: It solves the bottleneck of high-density deployment in the 3.2T era and is expected to be commercially available on a large scale in 2026.

B. Challenges and Opportunities: Facing challenges such as fiber-to-photonic IC alignment accuracy and thermal management, currently only Broadcom can supply CPO switches. Huawei HiSilicon, in collaboration with FlightControl Technology, launched the world's first 2.5D packaged CPO production line, with mass production planned for Q4 2025, breaking TSMC's technology monopoly.

III. Competitive Landscape: Chinese Vendors Lead Globally, Strong Players Maintain Dominance

(1). Market Share Consolidation

Global landscape: Chinese manufacturers account for more than 60% of the global optical module market share, and in 2023, the revenue of Chinese manufacturers surpassed that of Western manufacturers for the first time among the world's top ten manufacturers.

Significant leading effect: InnoLight Technology (14.2% global market share), Accelink Technologies (5.8%), and Eoptolink Technology (3.8%) are leading the pack.

(2). Accelerated Domestic Substitution

Policy support: The "Eastern Data, Western Computing" policy has promoted the construction of supply chain security, and China has formed a complete chain capability from materials to chips to packaging.

Technological breakthroughs: Accelink Technologies has achieved mass production of EML/DFB laser chips, and Yuanjie Technology's silicon photonics chips will be introduced into mass production in 2025.

(3). Opportunities for Second-Tier Vendors

Capacity spillover effect: The surge in demand for 800G has led to capacity shortages for first-tier manufacturers, and some orders may spill over to second-tier manufacturers. HGTECH is a core potential beneficiary, with its Thailand base having a monthly capacity of over 100,000 units. Testing of its 800G products with a US customer is progressing smoothly, and mass production is expected in the second half of 2025.

ETU-Link Technology Co., Ltd. as a key player in the domestic optical module field, continues to delve into high-speed optical communication technology, actively deploying in the research and development of 800G and future higher-speed products, and leveraging the advantages of the domestic supply chain, it is expected to further increase its market share in the AI-driven market demand.

IV. Future Outlook: Triple Growth Curves, Edge AI Unlocks Hundred-Billion-Dollar Market

Short term (2024-2025): 800G volume increase + 1.6T volume increase, LPO/silicon photonics solution penetration rate increase.

Mid-term (2026-2028): CPO commercialization + 3.2T pre-research, with a leap in the value of a single module.

Long term (2030+): Edge AI boom (AI mobile phones/cars/robots) opens up a market worth hundreds of billions of yuan, and the scale of edge AI may reach 1.2 trillion yuan in 2029.

ETU-Link Technology Co., Ltd. as a key player in the domestic optical module field, closely follows industry trends and implements a full-cycle strategy:

In the short term , the company focuses on 800G product R&D and capacity building to meet the upgrade needs of data centers. In the medium term, it invests in advanced technologies such as silicon photonics and LPO to improve product competitiveness and power consumption performance. In the long term, it is strategically positioning itself in emerging edge AI scenarios such as automotive optical interconnection and consumer electronics to expand its market reach. Leveraging the advantages of the domestic supply chain, the company controls costs and ensures delivery, and is expected to continue to increase its market share and influence in the AI-driven optical module market.