Optical communication concept stocks experienced a collective rise. At the time of writing, Cambridge Technology (06166) was up 7.1% at HK$143.6. TIME INTERCON (01729) gained 6.8% to HK$19.8. YOFC (06869) advanced 6.51% to HK$229.2. FIT HON TENG (06088) increased by 6.25% to HK$9.01.

The positive momentum follows a strong performance in the US market, where the optical communication sector closed higher on May 22, with Lumentum (LITE) surging over 11%. Recently, Lumentum's CEO, Michael Hurlston, stated that capital expenditures from US hyperscale cloud service providers are immense and show no signs of slowing down. He noted that the company is increasingly falling behind demand, with its capacity through the end of 2028 expected to be fully booked within the next two quarters.

Lumentum forecasts a compound annual growth rate (CAGR) exceeding 150% for OCS shipments between 2025 and 2028, aiming to achieve over $1 billion in annualized revenue by 2027.

Analysts point to the booming construction of hyperscale AI data centers, which urgently requires the severely supply-constrained optical interconnect and storage chip supply chain. Guosheng Securities indicated that optical modules are undergoing a rapid transition from 400G to 800G/1.6T. Each speed upgrade imposes higher performance and quantity demands on upstream components like optical isolators and WDM filter films, creating a vast market space for communication-related optical components.

According to LightCounting, the market size for Ethernet optical modules (100G and above) and CPO is projected to grow 65% year-over-year by 2026, exceeding $50 billion by 2031.