Zhitong Financial APP learned that according to a research report released by open source securities, it is estimated that the potential demand for high-speed optical modules caused by NVIDIA Corp A100/H100GPU shipments in 2023 may reach 2 billion US dollars, while this potential demand is expected to further increase to about 2.7 billion US dollars in 2024. At the same time, the development of AIGC drives the transformation of data center from cloud service to "computing + storage" function.The intelligent calculation center accelerates the landing and drives the growth rate of the industry scale to enter the upward cycle.In addition, the growth of east-west traffic has transformed the network architecture from the traditional three-layer to two-layer ridge structure, and the multiple of optical module usage relative to the cabinet has been greatly increased from 8.8 times to 44x48 times, bringing marginal improvement in demand.
Core beneficiary targets: optical module leading manufacturers: Zhongji Xuchuang (300308.SZ), etc.; core optical device suppliers: optical library technology (300620.SZ), etc.
The main points of ▍ open source securities are as follows:
The downstream prosperity of the optical module driven by AI is boosted, and the logic of "quantity increase" in the industry is established.
AI large model derivation power chips are in short supply, bringing significant demand gain for high-end optical modules. According to estimates, the potential demand for high-speed optical modules caused by NVIDIA Corp A100/H100GPU shipments in 2023 may reach 2 billion US dollars, while this potential demand is expected to further increase to about 2.7 billion US dollars in 2024.
The expansion of data traffic and computing demand pushes the growth of data center size into the upward cycle. The development of AIGC drives the transformation of the data center from cloud services to the function of "computing + storage", and the intelligent computing center accelerates the landing of the data center and drives the industry scale growth into the upward cycle.
The flattening of the network architecture greatly increases the amount of optical modules in the data center. The growth of east-west traffic has transformed the network architecture from the traditional three-layer to two-layer ridge structure, and the amount of optical modules has increased significantly from 8.8 times to 44x48 times relative to the cabinet, bringing marginal improvement in demand.
5G network construction has entered the closing stage of the 14th five-year Plan, and demand gain has been injected into the medium transmission link. The 5G network built in 2019 mainly relies on 4G for non-independent networking, and the demand for optical modules has not been officially opened. In 2020, it entered the stage of independent networking, and the separation of CU and DU opened the medium transmission market.
The penetration of high-end products has been accelerated, and the trend of "price rise" in the industry has come.
Datong market 200G/400G accelerated deployment, 800G entered a small batch application stage, 1.6T development is in progress. Head optical module manufacturers have successively sent 800G products to North American cloud manufacturers for inspection in 2021 and 2022, and will enter the volume stage in 2024, while 400G has entered the stage of scale deployment in 2023.
Traffic growth drives 5G acceleration to iterate to high-speed optical modules. In the base stations on the side of the 5G wireless network, the forward transmission will be upgraded from 10G to 25G; the medium transmission may be dominated by 50GPAM4; in the return transmission demand of the bearer network, the metropolitan area network will be upgraded from 10G/40G to 100G, and the backbone network will be upgraded from 100G to 400G. 800G will also gradually infiltrate.
The proportion of high-speed optical modules shows an increasing trend, leading to the improvement of the profits of the head manufacturers. At present, the average price of 200G/400G/ 800G optical module is about US $200, 400 per unit, which is significantly higher than the price of low-speed products, and is expected to improve the gross profit margin of the head optical module manufacturers.
"New packaging + new materials + new technology" brings investment opportunities from 0-1
CPO is still in the stage of 0-1, and the market demand can be expected. CPO is an important scheme to reduce size, reduce power consumption and improve efficiency in high-speed transmission. According to Yole's forecast, the market size of CPO is about $38 million in 2022 and is expected to reach $2.6 billion in 2033, with CAGR reaching 46%.
Lithium niobate modulator is competitive in the scenario of ultra-high-speed interconnection, with high industry barriers and scarcity. It is mainly used for coherent communication in long-distance backbone networks from 100g to 1.2T and ultra-high-speed data centers with a single wave of 100G and 200G. Under the trend of high-speed optical communication, the demand elasticity is higher.
Silicon light is expected to become the mainstream technology in the future because of its advantages in cost / power consumption. Yole predicts that the market size of digital silicon optical modules will grow from $151 million in 2021 to $972 million in 2027, with CAGR reaching 36%.
Optical module demand is lower than expected, cloud computing manufacturers' capital expenditure is not as expected, NVIDIA Corp GPU shipments are not as expected, and so on.