With the continuous increase in demand for optical modules in the market, industry competition is becoming increasingly fierce, and price competition is also beginning to emerge, which poses a challenge for optical module enterprises.
Since 2023, the artificial intelligence boom has driven an increase in computing power demand, setting higher standards for optical module speed and power consumption. The demand for 800G this year is huge, and customer demand has not decreased. According to the progress of the delivery plan, it is expected that the shipment volume will further increase in the coming quarters.
According to research reports from multiple institutions, the 800G optical module plays a crucial role in the artificial intelligence computing power industry chain and is considered one of the most certain links.
The growth of 800G optical modules mainly comes from the development of artificial intelligence technology and the increasing demand for computing power. The construction of global data centers has driven the sustained and stable growth of high-speed optical device products, especially the rapid growth in demand for high-speed products.
According to relevant institutions’ predictions, the global market size of optical modules is expected to grow at a compound annual growth rate of about 11% from 2022 to 2027, and is expected to exceed $20 billion by 2027.
In the future, with the continuous increase in high-end products, it is expected to provide more performance support for the industry. As a key component of optical transmission equipment, the market demand for optical modules will continue to grow.
Starting from 2023, the iteration cycle of optical module speed is expected to be shortened from doubling every 4 years to doubling every 2 years. 2024 to 2025 will still be a critical period for the global artificial intelligence arms race, with the demand for computing power continuing to grow rapidly and the field of optical connectivity expected to continue to benefit.
In 2022, cloud service providers will gradually introduce 800G optical module products; By 2024, it is expected that 800G optical modules will see large-scale shipments, and 2025 is expected to become the first year of commercial use of 1.6T optical modules, marking the beginning of a new round of optical module iteration cycle.
2024 is expected to be the year of mass production for 800G optical modules, while the 400G optical modules for Ethernet switches will also rapidly increase. In the future, it is expected that more Ethernet customers will upgrade their products to 800G optical modules. In addition, traditional EML schemes, silicon photonics schemes, or LPO schemes will also be gradually validated.
In the era of cloud computing, the development of the communication field is slightly lagging behind compared to the computing field. In general, the iteration cycle of chips is about 2 to 3 years, while the iteration cycle of communication technology is about 4 to 5 years. However, driven by artificial intelligence, the importance of communication and computing has become increasingly equal. Nvidia’s progress shows that the iteration speed of chips has been shortened to one year, while the iteration speed of communication technology is also being significantly compressed to 1.5 years or even one year. In this context, top manufacturers with advanced technology and close cooperation with customers will further expand their advantages. With the continuous growth of high-end demand and the improvement of technological iteration speed, the industry pattern is expected to further concentrate on top manufacturers. With the continuous expansion of the artificial intelligence market, the optical communication industry may usher in one of the most prosperous stages in history.
