The intense competition in AI computing power has driven the explosive growth of the optical module market with dual wheel drive of 800G and 1.6T. Silicon photonics, LPO, and CPO technologies are leading the industry transformation, and Chinese enterprises dominate the global competition. Coupled with the explosive demand for AI inference and the expansion of emerging application scenarios, the high prosperity of the optical module industry will continue in 2026.
1, Market demand: 800G with a volume of 1.6T landing, demand exceeds expectations
800G Optical Module: Rising Demand, New Breakthrough in Technical Roadmap
By 2026, the shipment volume of 800G optical modules is expected to exceed 40 million units, with demand showing a pattern dominated by North America and followed by China. Meta、 Google, Microsoft, and Amazon are the core purchasers, with Meta demand reaching 10-12 million units, Google and Microsoft totaling about 12 million units, and Amazon about 5.5 million units; The demand for ByteDance, Alibaba and Tencent in China has gradually increased, and the total number of the three companies has reached millions. The market has strong confidence in 800G, and Goldman Sachs has raised its 2026 sales forecast from 25 million units to 33.5 million units, an increase of 58%.
1.6T optical module: ushering in the first year of commercialization, with demand doubling and growth
2026 will be the first year of commercialization for 1.6T optical modules, with a global demand expected to reach 8.6-20 million units. NVIDIA is the core driver, with demand increasing to over 5 million units by 2026. Google and Meta will have demand of approximately 4 million and 1 million units, respectively. Driven by the competition for AI computing power, overseas technology giants have raised their procurement plans for 2026 from 10 million to 20 million units. A single GB200 server requires 162 1.6T optical modules, further increasing demand.
2, Technological Trends: Three Major Technological Leads, Continuous Acceleration of Iteration Speed
Silicon optical technology: Mainstream high-speed optical modules, steadily increasing penetration rate
Silicon optical technology, with its advantages of low power consumption and low cost, has become the core direction of 800G and 1.6T high-speed optical modules, and its penetration rate will continue to rise. Huawei releases the world’s first single wave rate 1.6Tbps silicon optical module, using third-generation silicon photonics integration technology, reducing volume by 70% and power consumption by 40%.
LPO technology: optimizing power performance, becoming an important growth point in the market
LPO technology achieves dual optimization of power consumption and performance by removing DSP chips, perfectly adapting to the needs of AI data centers. It is expected that LPO modules will become an important growth pole in the optical module market by 2026.
CPO technology: cutting-edge exploration and promotion, large-scale application still needs time
CPO technology integrates the optical engine and switch chip into a package, which can reduce data center power consumption by more than 40%. TSMC’s micro ring optical modulator technology under 3nm process achieves efficient conversion between optical and electrical signals, reducing power consumption by another 40%. However, currently CPO is facing technical challenges such as alignment accuracy and thermal management, and only Broadcom can supply CPO switches, with limited supply capacity. Large scale applications are expected to be implemented after 2027.
Overall, in 2026, the optical module industry will be in a dual dividend period of technological iteration and demand explosion. The market growth will be driven by the dual wheels of 800G and 1.6T, and core technologies will continue to break through. Chinese enterprises will occupy the global competitive advantage, coupled with the continuous driving force of AI inference demand and emerging application scenarios. The high prosperity of the industry will continue for a long time, and enterprises with core technologies, top customer resources, and mass production capabilities will continue to lead the market.
