Industry research firm LightCounting predicts the global optical module market could exceed $37 billion by 2029. Notably, 800G optical modules are expected to hit peak demand in 2025, with global shipments potentially doubling year-on-year to 18–19.9 million units. Meanwhile, 1.6T modules are projected to enter commercial deployment in 2025, with global demand estimated at 2.5–3.5 million units.
CITIC Securities highlights that rapid advancements in GPUs and ASICs are driving higher computing power and surging data transmission needs. AI data centers increasingly favor higher-bandwidth network hardware, as it reduces per-bit transmission costs, power consumption, and physical footprint. The strong growth of 800G modules reflects AI's urgent bandwidth demands. By 2026, 800G demand is forecast to sustain rapid growth, while 1.6T shipments will expand significantly, and 3.2T module R&D is already underway.
CITIC recommends focusing on optical modules/components/chips, prioritizing: 1. Leading optical module firms 2. Companies poised for market/client breakthroughs 3. Upstream optical chip/laser/component suppliers 4. Firms entering the sector via acquisitions
**HK-listed optical module (CPO) players:** - **CIG (06166)**: H1 2025 net profit surged, driven by high-speed optical modules and telecom broadband. The company is advancing 400G/800G/1.6T module R&D, with 800G/400G products in mass production and 1.6T prototypes (3nm-based) showcased at OFC 2025. CPO device development is underway. - **TIME INTERCON (01729)**: A key player in MPO fiber optics and AI servers, its 16-core MPO products are bulk-shipped to overseas cloud providers like Google, with fiber revenue up 43% YoY in 2024/H1 2025. - **YOFC (06869)**: Expanding into high-value multimode/hollow-core fibers while optimizing its core fiber-optic business for AI-driven demand. Subsidiary initiatives in MPO/AOC/high-speed copper cables are fueling growth, supported by North American AI data center expansion. - **FIT HON TENG (06088)**: Advancing AI server projects, including high-current connectors, liquid cooling, and CPO solutions, with upcoming GB200/GB300 platforms expected to boost demand for power/cooling tech.