AI drives the network efficiency revolution, and laser chips are experiencing a golden period of rising volume and price
Currently, the focus of competition in AI computing clusters is undergoing a profound change, evolving from simply "stacking computing power" to "competing on network efficiency." In this context, building a high-performance, high-bandwidth, and low-latency network architecture has become the key to determining the overall performance upper limit of the data center. As the "heart" of the optical module, the laser chip directly determines the electro-optical conversion efficiency and product generation of the optical module, and its strategic position has become increasingly prominent. CITIC Securities pointed out that the laser chip industry is facing dual positive drivers: on the one hand, the scale-out (horizontal expansion) and scale-up (vertical expansion) needs of AI clusters promote the continuous expansion of network super nodes, directly driving the demand for high-speed optical interconnection; on the other hand, the rapid iteration of technology generations (such as the evolution from 400G to 800G, 1.6T) has brought about a significant increase in product value.
However, opportunities and challenges coexist. The current laser chip market is showing a structural contradiction between "explosive growth in demand" and "short-term supply rigidity". Since the core MOCVD equipment is monopolized by a few overseas manufacturers, and the production expansion cycle is as long as 18-24 months, production capacity cannot respond quickly to the surge in market demand. According to estimates, the market size of high-speed laser chips is expected to jump from US$930 million in 2025 to approximately US$4.06 billion in 2026, with a significant gap between supply and demand. This seller's market structure has made the bargaining power of leading manufacturers continue to increase, order visibility has extended to 2027 or even 2028, and the Matthew Effect in the industry has intensified.
The mismatch between supply and demand creates opportunities for localization, and local companies accelerate their breakthrough
Against the background of high industry prosperity, Soochow Securities particularly emphasized the "golden entry period" for domestic laser manufacturers. The nonlinear growth of global AI computing power infrastructure has driven the optical chip industry chain into a long-term upward cycle with strong Beta attributes. However, leading overseas manufacturers (such as Lumentum, Coherent, etc.) are limited by production bottlenecks and prioritize high-margin EML chips or bind orders from large customers such as NVIDIA, resulting in a supply vacuum for general-purpose or specific-specification products. This mismatch between the rate of production capacity release and the rhythm of demand explosion provides a valuable market gap for domestic manufacturers with the ability to respond quickly.
More importantly, changes in technical routes have opened a new window for domestic substitution. With the advent of the 1.6T era, silicon photonics solutions have become mainstream due to their cost and power consumption advantages. The core light source in silicon photonics solutions, CW (continuous wave) lasers, has a simpler manufacturing process than EML, decouples the modulation function, and lowers the technical threshold. Domestic manufacturers such as Yuanjie Technology, Shijia Photonics, Changguang Huaxin, etc. have achieved mass production and shipment of 70mW and 100mW CW lasers, and some companies have even launched 300mW high-power products for the CPO field. Domestic manufacturers are accelerating their move from "technical stuck position" to "large-scale commercial use". They are expected to seize market share with cost-effective and flexible services in this round of global supply chain restructuring, and achieve a leap from "following" to "running alongside".
