During the early trading session on June 29th, the CPO optical module sector continued its correction, with Suzhou Tfc Optical Communication Co.,Ltd. leading the decline, down 9%. Eoptolink Technology Inc.,Ltd. and other major players also fell by over 4%. Among popular ETFs, the ChiNext Artificial Intelligence ETF (159363), which focuses on the optical module sector, declined over 4% in the secondary market, yet it attracted significant capital inflows of 40 million units. This ETF has seen cumulative net inflows exceeding 2.2 billion yuan over the past week.
Trigger for the Recent Decline
The immediate catalyst for this round of declines was the Glass Bridge optical interconnect platform unveiled by US fiber optics giant Corning at the "AI Data Center Optical Communication Interconnect Technology Conference" in Seoul, South Korea, on June 24th. Market concerns have arisen that this technology, which utilizes wafer-level preformed glass optical waveguides to achieve passive alignment between optical fibers and photonic chips, could significantly simplify the fiber array units (FAUs) and precision active coupling equipment traditionally relied upon in CPO architectures. This has led to fears of long-term pressure on demand for related midstream components.
Perspective on the Technology's Impact
Overall, however, the "Glass Bridge" technology pre-forms optical pathways within glass using wafer-level processes, simplifying the coupling process between photonic integrated circuits (PICs) and external optical circuits. This essentially paves the "last mile" of the assembly road for CPO, transforming it from a laboratory "precision manual craft" into a standardized, mass-producible "industrial product." Therefore, "Glass Bridge" is seen as a catalyst for the industrialization of CPO, not a competitor.
Market Outlook and Analyst Views
Looking ahead, analysts have expressed a positive outlook for the CPO sector. They state that with the iterative landing of the entire industry chain, the growth logic for the CPO (co-packaged optics) photoelectric co-packaging track is clear, and the industry's potential is fully opening up. As a disruptive technology for AI data center optical interconnects, CPO completely breaks through the three major physical bottlenecks of power consumption, density, and bandwidth in traditional pluggable optical modules, positioning it as the core evolution direction for next-generation ultra-high-speed computing networks.
Regarding the outlook for AI technology stocks, one global financial institution indicated that, given strong earnings momentum, high participation enthusiasm, and incremental capital from new IPOs, they remain optimistic about Chinese AI technology hardware for the remainder of the year. Specifically, while some signs suggest the Chinese AI tech upcycle is gradually nearing its peak, it is still premature to exit the tech sector. They favor leading companies in key AI sub-sectors, including optical modules, memory, GPUs, copper-clad laminates, and semiconductor equipment.
Focus on the Leading ETF
For targeted exposure to leading optical communication companies, investors may consider the ChiNext Artificial Intelligence ETF (159363) and its corresponding feeder funds (Class A 023407, Class C 023408). The underlying index has a combined weighting of approximately 40% in key players, making it a core representative of the AI computing power theme. Furthermore, the ETF boasts significant scale and high liquidity within the dual-innovation AI investment space.
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