CICC: Optical communication liquid cooling is a high-slope circuit with both increased demand and increased unit value
The Zhitong Finance App learned that CICC released a research report saying that it is optimistic about the high growth of the optical communication cooling circuit, which benefits from increased liquid cooling penetration rate and the evolution of new technology under the beta of AI computing power clusters, and there is a greater chance of entering the mainland supply chain. It is recommended to focus on liquid cooling opportunities for optical module VC, liquid cooling cages, and co-packaged switches.
CICC's main views are as follows:
Optical communication components have strong liquid cooling requirements. Core components such as lasers, modulators, driver chips, and DSP in optical modules are sensitive to temperature. High temperatures not only affect device efficiency and transmission performance, but may also reduce signal stability, service life, and system reliability. As the optical module rate continues to be upgraded from 400G to 800G, 1.6T and higher, the power consumption of a single module continues to increase, traditional air cooling capacity gradually approaches the boundary, and the importance of solutions such as VC evaporators, liquid cooling cages, and switch liquid cooling continues to increase.
Optical communication liquid cooling is a high-slope racetrack with both increased demand and increased unit value. On the one hand, AI computing power clusters continue to expand, and scale-out, scale-up, and scale-across are jointly driving demand for optical connectivity, and the optical communication industry has a strong beta; on the other hand, while the liquid cooling penetration rate of optical communication is increasing, optical modules evolve at a higher rate, and the emergence of new technologies such as NPO, CPO, and XPO will also drive the continuous growth of optical communication cooling space. The optical module VC market is expected to reach 5.03 billion yuan in 2027, +257.4% over the same period. The liquid-cooled cage market will also benefit from increased optical module shipments, increased liquid cooling penetration rate, and increased single-port value, and has higher elasticity. In 2027, the optical module liquid cooling cage market space is 12.5 billion yuan, +776.5% over the same period last year.
Mainland suppliers have great opportunities to enter the optical communication liquid cooling supply chain. In the field of optical modules, the mainland's optical module industry chain has strong manufacturing and industrial cluster advantages, so it is easier for mainland heat dissipation component manufacturers to rely on customer collaboration, quick response, and cost control capabilities to import optical module components such as VC and TIM. In the field of optical module cages, the ecology is relatively open. Mainland manufacturers have already entered some leading overseas connector supply chains in the air-cooled cage era. It is expected that the liquid cooling era will continue to use existing supply relationships and manufacturing capabilities. At the same time, optical module cages are an labor-intensive industry, and mainland manufacturers have obvious advantages.
risk
Demand for AI capex and optical modules falls short of expectations; industrialization of new optical communication technologies falls short of expectations; liquid cooling penetration rate of optical modules falls short of expectations; risk of changes in liquid cooling technology routes.