Founder Securities: Optical Module Demand Explodes, Driving Equipment into the Fast Lane of Development

Founder Securities issued a research report stating that driven by AIDC and cloud computing, high-speed optical modules—especially optical modules of 800G and above—are developing rapidly. The development of 800G optical modules began in 2020–2021, and they currently have mass-production capability. In the past, optical modules were characterized by multiple batches and small batch production. With the surge of AI demand, the demand for automated assembly equipment has also increased. This firm expects that with the surge of optical module demand, automated equipment will usher in the first year of expansion.

The main views of Founder Securities are as follows:

Optical modules are the core components in optical communications that realize optical-electrical conversion and electro-optical conversion, and are typically formed by an optical transmitter component (TOSA), an optical receiver component (ROSA), driver circuits, optical interfaces, and other packaged elements

In optical communication systems, optical modules are the basic building blocks of the system’s physical layer, and account for more than 50% of the cost share in system equipment. Driven by AIDC and cloud computing, high-speed optical modules—especially those of 800G and above—are developing rapidly. Development of 800G optical modules started in 2020–2021, and they currently have mass-production capability. As the most advanced mass-production technology currently, the 800G optical module has an expected 2020–2024 CAGR of about 188%, and an expected 2024–2029 CAGR of about 19%. The development of 1.6T began in 2022–2023, and under the impetus of steadily growing demand for higher bandwidth, lower power consumption, and AI-driven data processing, it will rise quickly. Furthemore, according to FosTer Sullivan, the 1.6T optical module’s 2024–2029 CAGR is expected to reach 180%. With the start of large-scale infrastructure projects, 1.6T is expected to gradually enter the mainstream application stage, while 3.2T has also begun the pre-research stage. In 2024, the global optical module market is about $17.8 billion (about RMB 124.6 billion). In 2025, it is expected to be $23.5 billion (about RMB 164.5 billion). The market size is expected to reach $41.5 billion (about RMB 290.5 billion) by 2029, with an expected 2024–2029 CAGR of about 18%.

During the high-speed evolution of data transmission, the cooperative mode between optical modules and switching ASICs is undergoing key changes

From the perspective of device packaging, improvements in signal transmission rate will also bring insertion loss issues. At present, two categories of mainstream solutions have emerged: 1) Co-packaged optics (CPO): optical and electrical components are jointly packaged. 2) Linear photonics optics (LPO): pluggable modules equipped with linear optics drivers.

Benefiting from the surge of AI computing power demand, the global market for high-speed optical module packaging and testing equipment has shown leapfrogging growth

According to data from Furthemore, the global market size for optical module packaging and testing equipment increased from 590 million yuan in 2020 to 5.18 billion yuan in 2024, with a CAGR of 71.8%. Among them, the market size for 800G optical module equipment surged from 10 million yuan in 2022 to 3.02 billion yuan in 2024, becoming the fastest-growing sub-segment. It is expected that the market size in 2025 will be 6.05 billion yuan, and by 2029 the overall market size for optical module equipment will reach 10.16 billion yuan.

The core steps of the optical module production process mainly include chip placement (SMD), wire bonding, optical coupling, automated assembly, aging testing, and so on

Chip mounters, optical coupling machines, and aging testing are the most core equipment. Among them: the market size of the die bonder machine reached 980 million yuan in 2024. In terms of value share in optical module packaging and testing equipment, it accounts for about 18.9%. It is expected that its market size will reach 2.40 billion yuan by 2029, with a 2025–2029 CAGR of about 18.9%. If the eutectic bonder machine is considered, the combined market size of eutectic/bonding machines and die bonders in 2024 is close to 2.0 billion yuan, accounting for close to 40%.

The market size of optical coupling machines reached 1.21 billion yuan in 2024, accounting for about 23.3% of the value share in optical module packaging and testing equipment. It is expected that the global market size will be 2.27 billion yuan in 2029

The global market size of chip aging testing equipment in 2024 is 1.63 billion yuan, accounting for 31.4% of the total market of high-end optical module packaging and testing equipment. It is expected that by 2029 the global market size will reach 2.93 billion yuan. This is the equipment with the highest value share among optical module packaging and testing equipment. If module aging and testing are considered, the combined market size in 2024 is close to 2.0 billion yuan, accounting for close to 40%.

A vast flow of information and precise interpretation—right on the Sina Finance APP