Optical communication concept stocks showed a collective rebound. As of writing, Cambridge Technology (06166) rose 8.63% to HK$77.4; Foxconn Interconnect Technology (06088) increased 5.49% to HK$5.96; Winbase International (01729) climbed 5.31% to HK$17.45; and Hua Hong Semiconductor (01347) advanced 2.2% to HK$88.15. The surge follows news that NVIDIA has entered into multi-year strategic partnerships with two leading optical communication companies, Lumentum and Coherent, investing $2 billion in each for a total of $4 billion to advance research, development, and manufacturing of cutting-edge optical technologies. Kaiyuan Securities noted that this move further validates optical communication technology as a potential core solution for future AI data center interconnects, highlighting significant opportunities in upgrades such as silicon photonics, CPO, OCS, hollow-core fiber, and thin-film lithium niobate. China Galaxy Securities pointed out that the optical module sector remains on an upward trajectory, with strong current demand overseas. Leading cloud providers' capital expenditures for 2026 continue to exceed expectations, and improvements in GPU performance are driving a clear trend toward higher-speed optical modules abroad. The scaling of high-speed, high-value optical modules is expected to accelerate. Additionally, the long-term shift from copper to optical connections in scale-up scenarios is becoming more defined, further boosting the usage and demand for optical modules.
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