According to CICC research, the market for 100G and higher pluggable optical modules is projected to grow from nearly $20 billion in 2025 to over $50 billion by 2030, with the CPO market expected to reach $10 billion by 2030. As demand for optical communication surges and data rates increase, the importance of passive optical components is becoming more pronounced. Optical manufacturers, originally focused on consumer electronics, are now entering the optical communications sector. Their core technologies and capabilities for large-scale, high-reliability production are transferable, potentially establishing a new growth trajectory. The main points from CICC are as follows:
The rapid growth in optical module demand highlights the significance of passive components. Forecasts indicate the market for 100G and above pluggable modules will expand from approximately $20 billion in 2025 to more than $50 billion by 2030, with the CPO market anticipated to hit $10 billion by 2030. Passive components such as lenses, prisms, wavelength division multiplexers, isolators, and FAUs are crucial for optical signal transmission and precise coupling, accounting for about 11% of a module's bill of materials. As data rates advance toward 1.6T and beyond, alignment precision requirements are rising to the sub-micron level, driving a shift from traditional optical processing to semiconductor micro/nano-fabrication techniques.
The evolution of optical interconnect technologies is driving increased demand for passive devices. Pluggable optical modules contain multiple discrete optical elements per channel. CPO integrates the optical engine with the switch chip, requiring high-density, high-precision microlens arrays and FAUs for coupling optical fibers to chip waveguides. Optical circuit switching relies on core components like fiber collimator arrays with over a hundred channels, MEMS mirror arrays, and monitoring systems. Copper cable connections offer short-reach alternatives for board-level links. Multiple technological paths are expected to evolve in parallel, creating growth opportunities for various passive components.
Core technologies from consumer electronics are transferable, enabling new growth curves. Optical manufacturers have extensive experience in high-volume markets like consumer electronics and automotive, with billions of units shipped. They possess deep expertise in ultra-precision cold processing, molding, coating, nanoimprint lithography, and photolithographic etching, along with high-yield, high-reliability mass production capabilities. Several companies are extending their product lines into optical communications, offering microlenses/arrays, V-grooves/FAUs, and even optical modules. They are actively capturing incremental demand from pluggable modules while strategically positioning themselves in emerging areas like CPO and optical circuit switching, which could provide strong growth momentum.
Recommended companies include Zhejiang Lante Optics Co.,Ltd., Zhejiang Crystal-Optech Co.,Ltd., and Suzhou Dongshan Precision Manufacturing Co.,Ltd. It is also advised to monitor AAC TECH and Ningbo Yongxin Optics Co.,Ltd.
Risk factors include optical interconnect demand falling short of expectations; slower-than-expected commercialization of CPO, optical circuit switching, and other technologies; delays in product development; and intensifying industry competition.
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