Sinolink: Focus on Three Core Devices as Optic Modules Evolve towards High-Speed Rates and CPOadvancements.

Sinolink released a research report stating that optical modules are core devices for converting optical signals into electrical signals, iterating rapidly towards high-speed rates. In terms of segmentation, specialized optical module equipment is required for processes such as chip mounting, wire bonding, coupling, packaging, and testing, with value proportions of 20%, 1%, 40%, 12%, and 27% respectively. According to TrendForce's forecast, the capital expenditure of the world's eight major cloud service companies will reach $602 billion in 2026, a year-on-year increase of 40%. The expansion of AI capital expenditure is expected to drive investment in optical module production lines into a prosperity cycle. Optical modules are evolving towards high-speed rates and optoelectronic co-packaging (CPO), with a focus on coupling, testing, and chip mounting as three core devices. Sinolink's main points are as follows: The optical module industry is booming, and optical module equipment is a new blue ocean market. Optical modules are core devices for converting optical signals into electrical signals, iterating quickly towards high-speed rates. Optical modules are composed of optical transmitting/receiving components, laser chips, and electrical chips, and they play a role in connecting data between communication devices through optical-electrical conversion, with core requirements being high bandwidth, high reliability, low power consumption, and low latency. Specialized optical module equipment is required for processes such as chip mounting, wire bonding, coupling, packaging, and testing, with value proportions of 20%, 1%, 40%, 12%, and 27% respectively. Optical modules are modules that convert optical signals through multiple processes involving core components such as optical chips and electrical chips. According to SiHan Industrial Research Institute, an investment of approximately 500 million yuan is required for every one million 800G optical module equipment, mainly for chip mounting machines, wire bonding equipment, optical coupling equipment, packaging equipment, and testing instruments (equipment), with value proportions of 20%, 1%, 40%, 12%, and 17% respectively. According to TrendForce's forecast, the capital expenditure of the world's eight major cloud service companies will reach $602 billion in 2026, a year-on-year increase of 40%. The expansion of AI capital expenditure is expected to drive investment in optical module production lines into a prosperity cycle. Optical modules are evolving towards high-speed rates and optoelectronic co-packaging (CPO), placing emphasis on three core devices - coupling, testing, and chip mounting. Optical modules are evolving from 400G to 800G, 1.6T. The parameters of AI models expand by about 100 times every two years, and the expanding demand for transmission drives the rapid iteration of optical modules towards high-speed rates. According to the "Moore's Law of Optics", optical module technology completes one generation of upgrades every four years, achieving synchronous halving of cost and power consumption per bit. Currently, 800G optical modules have become the mainstream solution and entered the phase of mass production; with the continuous improvement in transmission efficiency demanded by the computational network, the market demand for ultra-high-speed rate optical modules such as 1.6T and 3.2T is expected to gradually rise. Optical modules are evolving from pluggable to optoelectronic co-packaging (CPO). The bandwidth of data center switches increases by 80 times, and the total system power consumption also increases by 22 times, with the power consumption of optical modules increasing by 26 times. Optical modules are a core component that requires power consumption optimization. According to ASE data, the CPO solution can reduce power consumption by about 60% and costs by over 30% compared to traditional pluggable optical modules, and it is expected to begin large-scale deployment in 2028. Focus on three core devices - coupling, testing, and chip mounting. 1) Coupling equipment: Silicon photonic chips, ultra-high-speed optical modules require alignment accuracy to be increased significantly to 0.05 m, while mid-high-speed optical modules require only 0.1 m, focusing on equipment suppliers that can provide high-precision coupling solutions. 2) Testing instruments: The increase in the speed of optical modules requires an increase in the bandwidth of sampling oscilloscope channels and the highest transmission rate requirements of error detectors. An 800G optical module requires a 59 GBaud error detector, while a 1.6T module requires a 113 GBaud error detector. Additionally, CPO requires verification of hundreds of system-level parameters, increasing testing time by 3 to 5 times, requiring equipment with higher integration, stability, and long-term testing capabilities, making testing equipment likely to become one of the core bottleneck points. 3) Chip mounting equipment: The increase in integration of high-speed optical module devices results in a reduction in chip size and spacing, significantly compressing the chip mounting tolerance space. The chip mounting accuracy requirement for 800G/1.6T optical modules is 3m, higher than the 5m requirement for 400G, requiring continuous improvements in chip mounting equipment. Risk Warning: AI capital expenditures fall short of expectations; AI large model development falls short of expectations; uncertain demand risks brought about by technological developments; intensified market competition.