Guosheng: The development of the AI industry promotes the development space of optical interconnection, reshaping the value of optical companies.

Guosheng released a research report stating that the AI industry is developing rapidly, and optical interconnection will usher in important growth opportunities in the future, becoming a key force supporting the development of frontier technologies such as AI. The rapid iteration of optical modules has brought vast market space for communication optical components. With the accumulation of precision optical technology, traditional optics has gradually expanded its business to the field of optical communication. The top traditional optics, with the accumulation of precision optical technology, has gradually expanded its business to the field of optical communication, injecting strong growth momentum into the company's development. Guosheng's main points are as follows: The AI industry is developing rapidly, and there is broad development space for optical interconnectivity. Microsoft, Google, Amazon, and META are experiencing continuous high-speed growth in their main businesses and AI core businesses, and have raised their capital expenditures for 2026. The optical transmission speed of traditional data centers is experiencing rapid iteration upgrades from 400G and 800G to 1.6T and 3.2T. At the same time, the proportion of optical modules to XPUs is continuously increasing. In the future, a cluster composed of tens of thousands/millions of XPUs may require fifty thousand/ten million optical modules respectively, with a ratio of 1:5/1:10. Optical interconnection will usher in important growth opportunities in the future, becoming a key force supporting the development of frontier technologies such as AI. According to LightCounting, the market size of Ethernet optical modules (100G and above) and CPO is expected to grow by 65% in 2026 year-on-year and exceed $50 billion in 2031. According to CignalAI, the market size of OCS is expected to grow from over $400 million in 2025 to over $2.5 billion in 2029. Upgrade of optical module speed, optical components are expected to rise in quantity and price. Optical modules are undergoing rapid iteration from 400G to 800G/1.6T. Each speed upgrade imposes higher requirements on the performance and quantity of upstream components such as optical isolators and WDM filters, bringing vast market space for communication optical components. In optical transceiver modules, main components include filters, polarizing beam splitters (PBS), non-polarizing beam splitters (NPBS), prisms, lenses, aspherical lenses, and various optical components, as well as circulators, collimators, combiners/splitters, and optical multiplexers. According to Frost & Sullivan, optical receive/transmit components without optical chips account for about 11.6% of the cost structure of optical modules, and filter costs account for 2%. CPO CPO integrates high-speed optical engines or optical modules with switch chips or large-scale AI computing chips on the same packaging substrate or in the same chassis through 2.5D/3D advanced packaging technology, shortening the electrical path to within 50 millimeters, significantly reducing transmission losses. The fiber array unit (FAU) is responsible for connecting PICs with external optical fibers. Its assembly technology and thermal stability directly determine the optical coupling efficiency. Each 1.6 terabit optical engine on X800-Q3450 contains an FAU with 20 optical fibers, and each system has a total of 1440 optical fibers. The FAU typically includes key optical components such as V-shaped grooves, reflectors, and optical fibers. The high power consumption of switch chips can lead to an increase in ambient temperature, affecting the performance and reliability of laser diodes. External laser sources (ELS) have emerged. X800-Q3450 CPO uses 18 external laser source modules, each module containing 8 CW-DFB laser chips. OCS The core of the Optical Circuit Switch (OCS) is to change the physical transmission path of optical signals through an optical switch matrix (such as MEMS mirrors, liquid crystal, or waveguide technology) to achieve end-to-end optical connections. Unlike traditional electrical switches that require "optical-electrical-optical" conversion, OCS completes signal routing entirely in the optical domain, avoiding the delay and power consumption caused by optical-electrical conversion, and features nanosecond switching rates, low latency, and high energy efficiency. MEMS OCS internal core devices include MEMS mirror arrays, fiber collimator arrays, filter rings/optical circulators, and precision optical components. Taking the 176x176 platform as an example, the cost breakdown of MEMS chips, calibration systems, two-dimensional collimator arrays, and two-dimensional MEMS arrays is 35%/31%/16%/2%, respectively. Traditional optics, with the accumulation of precision optical technology, have gradually expanded their business to the field of optical communication, opening up growth space. Consumer electronics, AR/VR, and optical communication fields are developing towards miniaturization, arrayization, and integration, and optoelectronic components are evolving towards complex thin-film systems, ultra-precision processing, and miniaturization integration. New micro-nano optical components such as microlens arrays, diffractive optical elements (DOE), beam homogenizers (Diffuser), and super surface optical elements are being scaled for application, achieving functions such as wavefront control, arrayed integration, and wavefront transformation that traditional optical components could not achieve, significantly shrinking the volume of optical systems, and becoming key supporting components in AR/VR and optical communication fields. With the explosive growth of AI computing power centers, there is strong demand for high-speed optical modules, with high-end optical devices and precision optical components becoming key. Top traditional optics, with the accumulation of precision optical technology, have gradually expanded their business to the field of optical communication, injecting strong growth momentum into the company's development. Recommendations to watch: Focuslight Technologies Inc., Zhejiang Crystal-optech, Qingdao Novelbeam Technology, Jiaxing ZMAX Optech, Sunyu Optics, Ningbo Yong Xin Optics, DongGuan YuTong Optical Technology, Mloptic Corp., Guangdong Hongjing Optoelectronic Technology Inc., Optowide Technologies, Zhejiang Lante Optics, etc. Risk warning: Development progress falls short of expectations, intensified industry competition, downstream market demand falls short of expectations.