Recent research indicates that the expansion of AI data centers and the competition for computing power are pushing data transmission rates beyond 1.6 Tbps. To secure their supply chains, major companies including NVIDIA, Google, and Meta are strategically securing production capacity from suppliers of Electro-absorption Modulated Laser (EML) and Continuous Wave Distributed Feedback Laser Diode (CW-DFB LD) chips. This move is prompting suppliers to aggressively expand production to meet customer demand, further driving the projected total capacity for EML and CW-DFB LD to more than double by 2026, reaching 50.7 million units per month.

Key Market Players

The top three suppliers in this market are Broadcom, Lumentum, and Sumitomo Electric, collectively holding a 55% market share.

Electro-absorption Modulated Laser (EML) Technology

EML is a high-performance optical communication component that integrates a laser light source with an electro-absorption modulator on a single chip. It offers extremely low noise interference and a very narrow spectral linewidth because the laser itself remains constantly lit. This makes it the ideal solution for data transmission at speeds of 800 Gbps and above, as well as for medium- to long-distance transmissions exceeding 2 kilometers. Due to its high technical barriers, the top three EML suppliers—Lumentum, Broadcom, and Mitsubishi Electric—hold a combined market share of 72%.

EML Capacity Expansion

Lumentum is not only actively expanding production of 100/200 Gbps EML but also successfully demonstrated a 400 Gbps per lane EML at OFC 2026 to meet demands for 3.2 Tbps transmission. Furthermore, NVIDIA's EML solution focuses on maintaining signal stability and high efficiency.

Continuous Wave Distributed Feedback Laser Diode (CW-DFB LD) Applications

Other cloud service providers are actively developing CW-DFB LD for use in Optical Circuit Switch (OCS) and Silicon Photonics Co-Packaged Optics (SiPh CPO) solutions.

CW-DFB LD Production Leaders

Broadcom and Sumitomo Electric are tied for the leading position in CW-DFB LD production capacity, followed by Coherent and the LandMark/LuxNet partnership. These four entities account for a combined 74% of the total production capacity. Coherent is accelerating the production of 6-inch indium phosphide wafers to support mass production and is also developing a 400mW CW-DFB LD for use in silicon photonics pluggable optical transceivers and co-packaged optics.