According to a research report from Gf Securities, the global wave of AI infrastructure development is fueling sustained high growth in demand for optical modules and server assembly. Production line expansion coupled with technological upgrades is also generating significant need for automated production lines. With leading manufacturers maintaining high levels of capital expenditure, equipment suppliers are expected to continue benefiting. The firm recommends focusing on companies involved in optical module packaging equipment, optical module testing equipment, and automated server assembly and inspection systems. Key viewpoints from Gf Securities are as follows:
Strong demand from AI infrastructure is further expanding the market potential for optical modules. As core components in optical communication that enable optical-electrical/electrical-optical conversion, optical modules are seeing their market prospects enhanced by both Scale-Up and Scale-Out dynamics. On one hand, Scale-Out, being a primary source of demand, drives iterative needs from 800G to 1.6T/3.2T as data transmission rate requirements increase. On the other hand, as traditional copper interconnects in Scale-Up architectures approach limitations, the adoption of optical interconnect technology in Scale-Up networks is expected to rise. Citing Lightcounting forecasts referenced in Zhongji Innolight's 2025 interim report, the global Ethernet optical module market is projected to grow from $18.9 billion in 2026 to $35 billion by 2030.
In optical module equipment, capacity expansion and technological iteration are creating robust demand for automated production lines. Historically a labor-intensive industry, optical module production relied on significant workforce expansion for scaling capacity. However, with current output increases and substantially higher precision requirements, manual assembly can no longer meet production demands, giving rise to the need for automation. The manufacturing process involves multiple steps such as chip mounting, wire bonding, optical coupling, packaging, and aging tests, requiring equipment like die bonders/eutectic bonders, wire bonders, optical couplers, and testing devices. According to Frost & Sullivan data cited in Lieqi Intelligence's prospectus, the global optical module packaging and testing equipment market is expected to expand from RMB 590 million in 2020 to RMB 10.16 billion by 2029, representing a CAGR of 37.2%. Among the equipment, mounters, optical couplers, and testers are the most critical and carry relatively higher price tags.
For server automated assembly equipment, the trend toward production line automation is inevitable, as evidenced by the development path of Apple's supply chain. AI data center servers are typically structured from "compute card - compute node - rack - cluster," with server manufacturing divided into 12 integration levels from Level 1 to Level 12. Although AI server contract manufacturing currently remains in an early stage dominated by manual assembly, increasing server complexity and assembly difficulty are expected to drive the need for automated production lines in the future, thereby boosting demand for automation equipment.
Risk factors include slower-than-expected expansion of optical module production, delays in automating server assembly lines, potential shortfalls in global AI infrastructure investment, and risks associated with technological iteration and intensified competition.
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