CITIC SEC has released a research report indicating that robust AI computing power demand is driving sustained growth in optical module shipments, with speed upgrades accelerating demand for related analog chip part numbers. Leading manufacturers both domestically and internationally have issued positive guidance for their optical module businesses, with global analog chip leader ADI projecting that its OCS business will maintain double-digit growth through 2026-2027.
Since early 2026, domestic leading analog companies have also seen rapid volume growth in their optical module-related operations, contributing significantly to strong earnings momentum. The report outlines several key perspectives on this trend.
ADI, the global analog semiconductor leader, has offered an optimistic outlook for its optical module business, anticipating that OCS revenue will nearly double in 2026 and continue to double in 2027. During ADI's August 19 earnings call for fiscal Q3 2026, the company reported communication business revenue of $655 million, a year-over-year increase of 84%, with data centers now representing 80% of communication revenue. Both optical communication and power product revenues grew by more than 100% year-over-year. ADI forecasts fiscal Q4 2026 revenue between $4.2 billion and $4.4 billion, a sequential increase of approximately 7%, with communication expected to lead growth at around 10% quarter-over-quarter. The company attributes its optical module business growth to higher shipment volumes, increased value per module, and expanded market share.
The acceleration of optical module deployment is delivering clear benefits to the analog chip industry. Driven by surging AI computing demand, global high-speed optical module adoption continues to climb at a rapid pace. According to TrendForce data, the report estimates that global 800G and 1.6T optical module shipments will reach 50-60 million and 20-30 million units respectively in 2026, with 3.2T modules expected to begin ramping in 2028. Yole Group projects that the global optical module market will expand at a 30% compound annual growth rate from 2025 to 2031. Citing Yole Group, the report estimates that analog chips account for roughly $8-10 of BOM value in 800G modules and $16-20 in 1.6T modules, meaning continued volume growth and iterative upgrades will drive performance gains for analog companies.
Key risks identified include slower-than-expected recovery in the analog chip industry, intensifying market competition, delays in new product development by domestic manufacturers, slower-than-anticipated customer acquisition by local firms, underperformance in mergers and acquisitions or integration efforts, and potential capacity constraints.