CICC: Optical communication liquid cooling is a high-growth track that meets the demand increase while enhancing the unit value of CKH HOLDINGS.

CICC published a research report stating that under the beta of the expansion of AI computing power clusters, the high growth potential of the optical communication cooling track, benefiting from the increased penetration rate of liquid cooling and the evolution of new technologies, presents greater opportunities for mainland supply chains. It is recommended to pay attention to optical module VC, liquid cooling cages, and liquid cooling opportunities for co-packaged switches. CICC's main points are as follows: Optical communication components have a strong demand for liquid cooling. Core devices in optical modules, such as lasers, modulators, driver chips, and DSPs, are sensitive to temperature. High temperatures not only affect the efficiency and transmission performance of these devices but may also reduce signal stability, lifespan, and system reliability. As the rate of optical modules continues to upgrade from 400G to 800G, 1.6T, and even higher rates, the power consumption of single modules continues to increase. The traditional air-cooling capacity is gradually nearing its limits, making solutions like VC heat spreaders, liquid cooling cages, and switch liquid cooling increasingly important. Optical communication liquid cooling is a high-growth track with increasing demand and enhanced unit value. On one hand, the continuous expansion of AI computing power clusters, along with scale-out, scale-up, and scale-across, drives the growth of optical interconnection demands, with the optical communication industry showing a strong Beta; on the other hand, as the penetration rate of liquid cooling in optical communication increases, the evolution of optical modules to higher rates, along with the emergence of new technologies such as NPO, CPO, and XPO, will also drive continuous growth in the optical communication cooling space. It is anticipated that the VC market for optical modules will reach 5.03 billion yuan by 2027, a year-on-year increase of 257.4%. The liquid cooling cage market will simultaneously benefit from the growth in optical module shipments, increased penetration of liquid cooling, and rising unit value, offering greater resilience. The market space for optical module liquid cooling cages is expected to be 12.5 billion yuan in 2027, a year-on-year increase of 776.5%. Mainland suppliers have significant opportunities to enter the optical communication liquid cooling supply chain. In the field of optical modules, the mainland's optical module industry chain possesses strong manufacturing and industrial cluster advantages. Therefore, mainland cooling component manufacturers can more easily introduce components such as optical module VC and TIM based on customer collaboration, rapid responses, and cost control capabilities. In the optical module cage sector, its ecosystem is relatively open. Mainland manufacturers have already entered the supply chain of some overseas leading connector providers during the air cooling cage era, and it is expected that they will continue to leverage existing supply relationships and manufacturing capabilities in the liquid cooling era. Additionally, optical module cages are labor-intensive industries, giving mainland manufacturers a clear advantage. Risks AI capital expenditures and optical module demand may not meet expectations; the commercialization progress of new optical communication technologies may fall short of forecasts; the penetration rate of liquid cooling in optical modules may be lower than anticipated; risks associated with changes in the liquid cooling technology pathway.