CITIC Securities: The high-end demand and productization of AI jointly drive the growth of the optical module market into a new cycle.

Guotou Securities issued a research report stating that the optoelectronic module industry is currently experiencing a clear cycle of rapid technological iteration and concentrated demand release. 800G products have become the core driving force for performance growth, and the large-scale commercialization of 1.6T is expected to be fully launched in 2026. In this process, the industry's high technological barriers and scale thresholds have accelerated market share concentration towards leading companies with both advanced technological capabilities and mass delivery strength. It is recommended to focus on leading companies in the high-speed optoelectronic module field that have established a solid market position, deep technological accumulation, and key customer resource advantages. Guotou Securities' main points are as follows: AI computing power drives the entire chain of optoelectronic modules, and domestic substitution builds a new industrial ecosystem. The demand for AI computing power continues to expand, the optoelectronic module industry's prosperity continues to rise, and it brings opportunities for various parts of the industry chain. (1) Demand side: high-spec products are entering a period of mass production. The global data communication market has become the industry's core DRIVE, with 800G reaching the bottom and 1.6T breakthrough, ushering in a new product cycle. (2) Value chain: the proportion of core upstream component values is increasing, and industrial value is further concentrating on components such as optical chips. (3) Domestic substitution: China leads the world in packaging, but breaking the overseas monopoly on high-end optical/electrical chips is a key point for achieving independent controllability. The industry center is shifting upwards, and the optoelectronic module market in 2026 may welcome AI demand expansion and high-end structural volume growth. A new round of AI infrastructure construction drives the high-speed optoelectronic module demand. It is expected that global cloud providers' capital expenditures will continue to rise in 2026, combined with AI cluster expansion, the deployment of new generations of computing platforms, and the implementation of 1.6T/CPO technology, jointly forming the core DRIVE. The industry is evolving along two paths: first, Scale-out expands horizontally through leaf spine architecture, and the demand for optoelectronic modules is magnified by a "multiplier effect"; second, Scale-up breaks through copper cable bandwidth and distance limitations, accelerating the penetration of high-end optoelectronic modules in applications such as GPU cabinet interconnection and memory pooling. The acceleration of optoelectronic modules towards high-end drives value escalation, and new technologies indicate the industry's main line. 1.6T optoelectronic modules are becoming the key path to break through system bottlenecks and achieve cost reduction and efficiency improvement in data centers. Its advantages include doubling bandwidth, halving optical fiber length, and reducing total cost of ownership, making it the mainstream direction for the next generation of computing networks. Starting from 2025, 1.6T products will transition from the validation phase to large-scale deployment, with leading manufacturers having completed technical reserves and accelerating mass production. The full-scale introduction of 1.6T will not only significantly increase the ASP and value of the optoelectronic module industry, but also drive simultaneous improvement in the upstream industry chain, opening up the second round of value reassessment cycle in the high-speed interconnection industry chain. Risk warning: Development of new technologies falls short of expectations; AI application development falls short of expectations; intensification of market competition; international geopolitical risks.