Billion dollar optical module market! domestic manufacturers tap deep into the potential of high-speed optical chips

Billion dollar optical module market!

Accelerating the localization of optical chips, domestic manufacturers tap deep into the potential of high-speed optical chips

Currently, the domestic large model market is entering the stage of application implementation, and the rapid development of AI applications is driving the release of demand for optical modules. The upstream optical chip sector is also experiencing rapid growth. There is no doubt that the light market has become a battleground for military forces, and domestic manufacturers have successively laid out their presence, including Huawei, Guangxun Technology, Bochuang Technology, Hengtong Optoelectronics and other manufacturers, all of which have made new progress. Some startups have also received attention from the capital market and secured a new round of financing.

The market for billions of optical modules, with domestic exports reaching 9.5 billion in the first quarter

According to data from international market research institutions, the market size of optical modules will reach 13 billion US dollars in 2022 and show a trend of growth. At the same time, the export value of Chinese optical modules is also maintaining growth. According to data from the General Administration of Ocean Light, the export value in March alone reached 3.5 billion yuan, and the overall shipment volume in the first quarter reached 9.5 billion yuan. From this, it can be seen that the future market for optical modules will provide growth opportunities for players in the domestic industry chain.

Optical modules mainly use optical chips and electrical chips, with optical chips being one of their core components. Among them, optical chips are divided into laser chips and detector chips. From the classification of substrates, they can also be divided into optical chips made of InP active material system integrated components and optical chips made of "passive materials" such as silicon.

The surface emitting laser chip is a VCSEL chip, mainly made of GaAs material system, used for short-range scenarios. Edge emitting laser chips include FP, DFB, and EML chips, mainly based on the InP material system. DFB and EML chips are suitable for medium to long distance and high-speed scenarios, while FP chips are used for medium to short distance scenarios. The detector chip is mainly composed of Si/Ge/InP material system.

According to the report from Guoxin Securities Economic Research Institute, optical communication modules are mainly composed of optical devices, circuit chips, PCB boards, and casings. Among them, the cost of optical devices accounts for 70%, including TOSA components with laser chips as the core, ROSA components with detector chips as the core, and filters. In terms of cost, optical chips have the highest proportion, with high-end optical modules accounting for up to 70% and low-end optical modules accounting for about 30% .

From the current progress in China, Zhongji Xuchuang is a leading global manufacturer of high-end optical modules. As early as two years ago, the company stated that its self-developed 200G silicon optical chips have been shipped overseas and have production bases in Thailand and Taiwan. 1.6T optical modules are currently being introduced to customers. Some models of 400G and 800G adopt silicon photonics solution and have started shipping.

High speed optical chips will become the key to the next stage of development

According to data from the China Academy of Commerce Industry Research, in 2022, the localization rate of 2.5G and below speed optical chips will exceed 90%, and the localization rate of 10G optical chips will be about 60%. Domestic manufacturers are still investing in research and development of 10G optical chips with high technical difficulties, such as 10G VCSEL/EML laser chips, to break through technological bottlenecks; The localization rate of 25Gbs and above optical chips is only 4%, indicating significant development potential in the future. High speed optical chips of 25G and above will enter a new stage of development with funding support from more companies.

From the perspective of product roadmap, more and more manufacturers will produce 800G optical modules with a single channel speed of 100G this year, and 800G optical modules with a single channel speed of 200G and LPO solutions will gradually increase this year.

There are numerous sub sectors in the field of optical chips, and industrial chain enterprises are entering different stages of development.