Communication is the core infrastructure that supports the development of new applications such as Metaverse. With the entry of
Meta Universe, the communication field is like a hot spring with boiling soup. Starting from the rebranding of overseas Internet
head manufacturer Facebook to Meta, Microsoft and other giants have added Meta Universe to continue to drive the rapid
development of the optical module market in the Meta Universe era.

New infrastructure such as optical modules is an indispensable technology base for Meta Universe

Hardware infrastructure is the technological base for Metaverse development. On November 22, the Economic Daily pointed out that “For the future layout of Metaverse, it is necessary to focus on hardware and ecology to increase hardware penetration”.

With the development of Metaverse, the demand for traffic and data transmission will increase rapidly. As an important part of data transmission, optical modules will become an indispensable link in the construction of Metaverse. The rapid development of Metaverse will Promote the prosperity of new infrastructure such as optical modules.

LightCounting predicts that the optical module market will increase from USD 8 billion in 2020 to USD 14.5 billion in 2026. Among them, the sales of 400G/800G high-speed optical modules will account for 60%.
800G coherent optical modules enter the deployment peak

With the development of Metaverse, the demand for traffic and data transmission will increase significantly. In the first three quarters of 2021, mobile Internet traffic has increased substantially. The cumulative mobile Internet traffic in the first three quarters reached 160.8 billion GB, a year-on-year increase of 35.8%. The construction of base stations on the telecommunication terminal will gradually accelerate in the second half of the year, and the rapid advancement of the entire 5G industry chain will bring higher demand for optical modules, and the demand for fronthaul optical modules is rapidly increasing.

As a leading optical network equipment manufacturer, Huawei is also developing its own optical module products. In 2020, Huawei will be the first to make a breakthrough in the field of 800G optical modules, using self-developed oDSP chips.

The single-fiber capacity of the optical module reaches 48T, which is 40% higher than the industry solution. At the same time, it has flexible adjustment of the 200G-800G rate, which can help users adapt to a variety of application scenarios. Based on Huawei’s channel matching algorithm, the transmission distance is increased by 20% compared to the industry. Achieve a smooth evolution for the next 10 years. It can be said that 800G optical modules are leading in terms of performance.

As of the fourth quarter of 2021, two system suppliers have been able to provide 800G commercial products. At the same time, more and more operators are already in their A system with 800G capability is deployed in the network. In the survey, 12% of communication service providers (CSP) reported that they have deployed 800G or plan to deploy before the end of the year. We believe that 800G will enter the deployment peak in the next two years.

The competitiveness of domestic products advances into the world’s advanced ranks

At present, domestic optical module companies are already operating in 10G, 25G, and 40G. 100G, 400G, etc. have achieved a full product layout, among which there are many companies with a full industry chain layout, such as Accelink Technology and Huagong Zhengyuan. At present, there are also domestic companies that have entered the core suppliers of leading overseas manufacturers. According to Lightcounting’s rating, among the world’s top ten optical module manufacturers in 2020, Chinese manufacturers occupy 5 positions.

In addition, domestic and foreign manufacturers have begun to deploy 800G optical module products, and many domestic manufacturers have launched new products earlier than overseas leaders. Chinese manufacturers are expected to gain first-mover advantage in the 800G generation competition in the future. With the growth of downstream demand driven by Metaverse, the growth of 5G construction and the further acceleration of overseas data communication demand, optical modules are expected to usher in a new round of growth.