The next “wall” for AI is “moving data”
A fairly bold judgment from an expert at Nomura Research Institute of Optical Communications: supplies of 1.6T optical communications by 2026 may not be enough, with the shortage at least continuing through the second half of 2027.
What does this have to do with AI?
Right now, AI clusters have stacked tens of thousands to hundreds of thousands of GPUs, and GPU computing power keeps getting stronger. But GPUs also have to exchange data like crazy. In the past, copper cables could still get by; now that bandwidth has surged, optical communications is becoming a necessity.
So the AI supply chain is moving upstream from:
GPU → Switch → 800G → 1.6T → DSP → EML/laser → optical module → CPO
These “shovel sellers” need to pay close attention to:
Jingji XuChuang and New EDSL ramping up 1.6T optical modules;
Broadcom and Credo card DSP and high-speed interconnect chips;
Coherent and Source Photonics Technology (源杰科技) for upstream EML, lasers, InP, etc.;
Further downstream are CPO, NPO, silicon photonics, and optical engines.
Everyone already knows about GPUs, and optical modules have already been heated up in the market.
The real thing worth watching might be:
As AI develops further, which part is more likely to become “short supply”?
Nomura’s answer this time is very likely to be one of them: high-speed optical communications.
A fairly bold judgment from an expert at Nomura Research Institute of Optical Communications: supplies of 1.6T optical communications by 2026 may not be enough, with the shortage at least continuing through the second half of 2027.
What does this have to do with AI?
Right now, AI clusters have stacked tens of thousands to hundreds of thousands of GPUs, and GPU computing power keeps getting stronger. But GPUs also have to exchange data like crazy. In the past, copper cables could still get by; now that bandwidth has surged, optical communications is becoming a necessity.
So the AI supply chain is moving upstream from:
GPU → Switch → 800G → 1.6T → DSP → EML/laser → optical module → CPO
These “shovel sellers” need to pay close attention to:
Jingji XuChuang and New EDSL ramping up 1.6T optical modules;
Broadcom and Credo card DSP and high-speed interconnect chips;
Coherent and Source Photonics Technology (源杰科技) for upstream EML, lasers, InP, etc.;
Further downstream are CPO, NPO, silicon photonics, and optical engines.
Everyone already knows about GPUs, and optical modules have already been heated up in the market.
The real thing worth watching might be:
As AI develops further, which part is more likely to become “short supply”?
Nomura’s answer this time is very likely to be one of them: high-speed optical communications.
