CITIC Securities: Optical module acceleration simulation industry benefits significantly

The Zhitong Finance App learned that CITIC Securities released a research report saying that under the impetus of strong demand for AI computing power, the continuous volume and rate upgrades of optical module terminals are driving rapid growth in demand for related analog chip models, and leading domestic and foreign manufacturers are actively guiding optical module related business. For example, global analog leader ADI expects OCS to double in 2026-27. Since 2026, leading domestic simulation companies' optical module-related businesses have also ushered in rapid expansion, which in turn has led to rapid growth in performance.

CITIC Securities's main views are as follows:

The business guidelines related to ADI optical modules, the world's leading analog market, are optimistic, and OCS is expected to double in 2026-27.

According to global analog chip leader ADI's August 19 performance exchange: FY2026Q3's communications business revenue was US$655 million, up 84% year on year, of which data centers already account for 80% of communication revenue, and optical communication and power product revenue both increased by more than 100% year on year; the company expects FY2026Q4 revenue to be 42-4.4 billion US dollars, up about 7% month-on-month, of which the communications business is expected to increase by about 10% month-on-month, as the main force of growth. In addition, the optical module business is expected to benefit from increased sales volume, increased value of single module, and increased market share. Revenue from the OCS business nearly doubled in 2026 and continued to double in 2027.

The analog industry is clearly benefiting from the accelerated emission of optical modules.

Driven by strong demand for AI computing power, connectivity is driving the rapid growth of global high-speed optical modules. Referring to Trendforce data, the bank expects to ship about 5000-6000/2000-30 million 800G/1.6T optical modules in 2026, and 3.2T optical modules are expected to start in 2028. Yole Group predicts that the global market size of optical modules may continue to grow at a CAGR of 30% from 2025 to 2031. Referring to Yole Group, the bank expects the BOM value of analog chips to be about 8-10/16-20 US dollars in 800G/1.6T optical modules. Continued deployment and upgrading of optical modules will drive the analog company's performance growth.

Risk factors:

The risk that the recovery pace of the analog chip industry falls short of expectations; the risk of increased market competition; the risk that new products from local manufacturers fall short of expectations; the risk that new customers from local manufacturers fall short of expectations; the risk that the M&A layout or integration situation falls short of expectations; and the risk of tight production capacity.