Huafu Securities: Optical chips are the core value of optical communication, CW+ silicon light may become mainstream in the next generation
The Zhitong Finance App learned that Huafu Securities released a research report saying that optical chips are at the upstream of the industrial chain and are the core value of optical communication. The cost accounts for 30% to 60% of the total cost of optical modules, and is expected to account for more than 60% or even 70% as optical modules are iterated to 800G, 1.6T, or even 3.2T; rate upgrades drive technology iterations, and CW+ silicon may become mainstream in the next generation. The global optical chip market grew from RMB 13.5 billion in 2021 to RMB 32.8 billion in 2025. LightCounting expects to reach 233.6 billion yuan by 2030; the utilization rate of leading overseas production capacity has exceeded 90%, and the imbalance between supply and demand will become the norm in 2026-2027, and domestic optical chip manufacturers will usher in a critical window period.
The main views of Huafu Securities are as follows:
Optical chips are located in the upper reaches of the industrial chain and are the core value of optical communication
Optical communication chips are key components for converting optical signals. They are usually made of III/V compound semiconductor materials such as indium phosphide (InP) and gallium arsenide (GaAs). As the core carrier for optical modules to achieve photoelectric signal conversion, with the rapid growth in demand for optical modules at the Intelligent Computing Center (AIDC) and the rapid iteration of technology, optical chips have become a production capacity bottleneck in the entire industry chain, and also directly determine the performance of optical modules. From the perspective of industrial chain value, the cost of optical chips accounts for 30% to 60% of the total cost of optical modules, and is rising rapidly. As optical modules iterate to 800G, 1.6T, or even 3.2T, optical chips are expected to account for more than 60% or even 70% of the cost of the entire device. The gross margin of high-end optical chips is significantly higher than that of optical module assembly. With mass production of next-generation technologies such as CPO, profits in the optical module assembly process will decline rapidly, and profits will be further concentrated on CW light sources and high-speed EML array chips.
Speed upgrades drive technology iterations, and CW+ silicon light may become mainstream in the next generation
Optical communication chips are developing in the direction of higher speed and higher integration. There are two main paths for improving the speed and bandwidth of optical communication: 1) continuously increasing the transmission rate of single-channel signals through more advanced materials, processes, etc., and single wave rate is the foundation; 2) multi-channel parallel transmission and multi-wave multiplexing. Traditional technology mainly uses multi-channel solutions to increase the speed of optical modules above 100G. However, only increasing the number of optical channels will lead to an increase in module size and power consumption, but also significantly increase packaging complexity and system costs. Silicon light can manufacture optical devices on a large scale like making chips, greatly reducing the cost and power consumption of optical modules. A CW laser is a laser that only outputs stable continuous light and has no built-in modulation function. In the silicon light scheme, the CW laser chip is used as an external core light source, and the silicon-based chip performs a rate modulation function. CW-DFB is the optimal solution for AI high-speed optical interconnection and CPO technology, and its industrial position continues to rise.
AI computing power drives high growth in the industry, and domestic manufacturers may enter a golden period
The market size of the global optical chip industry grew from RMB 13.5 billion in 2021 to RMB 32.8 billion in 2025. As emerging technologies continue to break through the limits of speed, integration, and energy efficiency, optical chips may continue to be the basic enabler of next-generation optical communication. Nazen Technology quoted Frost & Sullivan. LightCounting expects the global optical chip market to maintain a strong growth momentum, reaching 233.6 billion yuan in 2030. Since optical chip manufacturing involves a precise epitaxial growth process, it takes a long cycle of 1 to 1.5 years from production expansion decisions to capacity release, the capacity utilization rate of leading overseas companies has exceeded 90%, and there is almost no flexible space. This means that the imbalance between supply and demand in 2026-2027 will become the norm in the industry, and upward pressure on prices will be significant. In this context, domestic optical chip manufacturers have ushered in a critical window period. From CW light sources to 100G EML, from domestic customers to North American customers, domestic substitution is advancing at an accelerated pace. Relevant domestic enterprises have achieved technological breakthroughs and sufficient production capacity plans, which are expected to benefit deeply from the industry boom.
Recommended to follow
Yuanjie Technology (leading domestic optical chip supplier), Changguang Huaxin (one of the few companies in the world that develops and mass-produces high-power semiconductor laser chips), Shijia Photonics (passive and active dual-chip platform advantages), Guangxun Technology (development and mass production of optoelectronic chips, devices, modules and subsystem products), Juguang Technology (a global influential company in the field of high-power semiconductor lasers), Dongshan Precision (its subsidiary Solsi Optoelectronics is the world's leading supplier of optical communication technology), San'an Optoelectronics (a subsidiary of Quanzhou San'an accurately lays out gallium nitride, gallium arsenide, substrate materials) Other industrial clusters), Yongding Co., Ltd. ( Covering the entire “chip-optical-MPO” industry chain system), etc.
Risk warning: the risk of technological upgrading and iteration, the risk of failure in the development and commercialization of new products, the risk of loss of core talent and technology leakage.