Industry Insight: AI Computing Power Reshaping Optical Communication Industry, From Telecom Support to Core Computing Infrastructure

Introduction

Over the past decades, the growth trajectory of the optical communication industry has long followed the construction cycles of carrier 5G networks and fiber-to-the-home deployments. Today, however, the large-scale expansion of global AI computing clusters is fundamentally rewriting the industry's demand logic: optical modules, optical fibers, and optical devices are no longer merely supporting components for communication networks, but have become the core foundation for internal interconnection within AI computing clusters. The industry has entered a brand-new cycle driven by data center demand. Amid the interplay of high-speed product iterations, supply chain restructuring, and shifting global trade dynamics, domestic optical communication enterprises are embracing overseas expansion opportunities while simultaneously facing long-term challenges such as upstream core chips and technology route selection.

I. Market Demand: AI Computing Power Becomes the Primary Growth Engine

Traditional optical communication market drivers came from carrier fixed networks and mobile base station construction; however, in this current prosperity cycle, AI data centers have become the largest source of incremental demand. As the demand for large model training and inference continues to expand, data exchange volumes between GPUs have grown explosively. The bandwidth and power consumption bottlenecks of electrical interconnection have become prominent, making optical interconnection the only viable solution.

Optical modules are the core hardware for computing power interconnection, and the pace of product iteration has accelerated significantly: 800G remains the primary global shipment force at this stage, while 1.6T optical modules are entering large-scale commercial deployment in 2026; 3.2T and 6.4T products are in customer validation stages, and 12.8T belongs to frontier pre-research prototypes. Meanwhile, the GPU-to-optical-module ratio continues to rise, with the number of optical modules per GPU in AI clusters continuously increasing, bringing dual growth dividends from both speed upgrades and volume increases.

Beyond high-speed optical modules, AI computing centers are driving simultaneous growth in demand for high-density optical fibers and passive devices. The fiber usage of a single large AI computing center far exceeds that of traditional IDC facilities. At the same time, carrier all-optical networks, overseas cross-border backbone networks, and broadband construction in emerging markets such as Southeast Asia serve as a second growth curve, supporting the industry's stable mid-to-long-term fundamentals.

II. Technology Routes: Multiple Solutions in Parallel, Integration as the Long-Term Direction

Industry competition has shifted from simple single-device speed comparisons to comprehensive competition in system integration, power consumption, and cost capabilities. Multiple technology routes are advancing in parallel, and no single technology will completely replace other solutions in the short term.

1. Pluggable Optical Modules (Traditional Solution): 800G and 1.6T pluggable solutions feature mature technology and simple maintenance, making them the current data center's first choice and suitable for rapid large-scale deployment.
2. Silicon Photonics Technology: Silicon photonics, leveraging its high integration and volume cost advantages, continues to increase its penetration rate in 1.6T and above high-speed products. Silicon photonics integrates discrete optical components onto silicon wafers, reducing device count and lowering high-speed interconnection power consumption, making it an important long-term direction.
3. CPO/LPO/NPO Co-Packaged/Near-Packaged Optics: CPO packages optical engines and ASIC chips together, significantly shortening optical path distances and solving power consumption challenges in ultra-high bandwidth scenarios; however, process, thermal management, and maintenance difficulties are higher, and large-scale comprehensive commercial deployment still requires time. LPO and NPO, as compromise solutions, seek balance points between power consumption, cost, and engineering implementation, gradually piloting in mid-to-short-term computing clusters.
4. Optical Fiber and Passive Technology: Hollow-core fibers and new specialty fibers continue to be developed for ultra-long-distance, ultra-low-latency transmission; all-optical switches, passive patching, fiber splicing, fiber testing, and other engineering supporting products are expanding synchronously with computing network construction.

III. Industry Chain Landscape: Strong Advantages in Equipment Assembly and Packaging, Upstream Chips Remain a Shortcoming

Domestic enterprises have already achieved global competitiveness in optical module assembly, passive devices, and optical fiber cables. A large volume of products are exported to North America, Southeast Asia, and European computing and communication markets, with foreign trade orders continuing to grow. From engineering tools such as fiber splice closures, terminal boxes, fiber distribution, and splicing machines, to 10G/Layer 3/data center switches and high-speed optical modules, domestic manufacturers possess complete supporting delivery capabilities, making them highly suitable for overseas system integrator procurement.

Industry chain shortcomings are concentrated in high-end optical chips: core components such as high-speed EML electro-absorption modulated lasers and DSP digital signal processing chips face tight supply, supply gaps, and long lead times, directly constraining high-end module production capacity release. This is also the current focus of domestic industry chain breakthroughs, with multiple optical chip enterprises continuously investing in 200G and above high-speed chip R&D, gradually achieving domestic substitution.

In terms of global market dynamics, overseas cloud providers and computing operators are the primary purchasers of high-speed modules. Geopolitical factors and supply chain security considerations have led overseas customers to prefer multi-supplier strategies, creating sustained overseas expansion opportunities for domestic manufacturers with compliance capabilities; meanwhile, communication infrastructure construction in emerging markets in Southeast Asia and the Middle East shows strong demand for low-to-medium speed optical devices, industrial switches, and passive optical fiber products, suitable for foreign trade enterprises to cultivate deeply.

IV. Core Industry Risks and Challenges

1. Technology Route Risk: The deployment pace of new technologies such as CPO and NPO carries uncertainty. Once technology routes shift, early-stage equipment and production line investments will face depreciation risks. Manufacturers need to balance short-term mass production products with long-term technology pre-research investments.
2. Supply Chain Bottlenecks: Tight supply of high-speed optical chips and DSP chips, upstream component price volatility, and delivery delays will directly impact order fulfillment.
3. Market Cycle Volatility: AI capital investment experiences periodic fluctuations. If cloud provider capital expenditures contract, high-speed optical module demand will cool rapidly; meanwhile, after significant new capacity release, mid-to-low-end products are prone to price competition.
4. International Trade Barriers: Export compliance requirements for high-speed optical modules and optical chip-related products are tightening. Overseas-expanding enterprises need to manage product classification, certification, and supply chain compliance effectively.

V. Enterprise and Foreign Trade Opportunity Assessment

For equipment manufacturers and foreign trade service providers, market opportunities can be divided into two tracks:

1. High-End Computing Track: Targeting overseas large IDC and AI computing cluster customers, focusing on 800G/1.6T high-speed optical modules and silicon photonics solutions. Customers value product stability, low power consumption, and long-term supply guarantees. The technical threshold is high, and margin space is greater.
2. Communication Infrastructure Track: Serving regional carriers and low-voltage integrators in Southeast Asia, the Middle East, and other regions. Products focus on industrial switches, POE switches, optical fiber passive devices, fiber splicing supporting tools, and FTTH terminal boxes. Demand is stable, orders are fragmented, suitable for foreign trade independent websites and channel distribution models, and this is also the market focus covered by foreign trade blogs.

In the long term, the pure hardware sales model will gradually face pressure. Customers increasingly need integrated solutions: from fiber testing and splicing construction to network planning and all-optical system deployment. Suppliers with both hardware and engineering service capabilities are more likely to build customer stickiness and avoid pure price wars.

Conclusion

This round of optical communication growth driven by AI computing power is not a short-term pulse market, but a mid-to-long-term industry restructuring brought by computing network architecture transformation. High-speed optical modules and silicon photonics integration are the industry's main lines, but traditional passive devices, communication switches, and optical fiber engineering supporting products still possess vast overseas markets. Domestic manufacturers have obvious advantages in manufacturing and supporting supply chains, but upstream core chip autonomy, global compliance operations, and new technology route selection remain key determinants of future competitiveness. Over the next 3 to 5 years, with the integration of computing networks and all-optical communication, the optical communication industry will continue to transform from a communication hardware supplier into a core service provider for global digital infrastructure.