Optical communications supply chain Report Interpretation

Overview

This CIOE 2026 preview examines technology roadmaps, product launches and supply-demand conditions across the optical-communications chain. Nomura argues that sustained AI data-center demand, supply bottlenecks and the transition toward NPO/CPO should favor technologically leading suppliers.

Core views

Nomura expects 1.6T pluggable optical transceivers to remain the mainstream product, supported by strong AI-networking demand in 2026-27F. Supply, however, remains tight: 200G EML chips are still constrained as suppliers ramp capacity and improve yields, while high-end DSP chips face yield-related shortages. Nomura identifies InP substrates, 200G EML, photodiodes and DSPs as bottlenecks that can restrain 1.6T module shipments. Global suppliers continue to dominate high-end 200G EML, 200mW-plus CW laser and DSP products, although Chinese suppliers are moving into high-end optical-chip supply chains. Everbright is progressing customer validation for 200G EML chips and plans mass production in 4Q26; Shijia Photons has validated its 1.6T AWG chip and begun small-batch shipments. The report sees 3.2T/6.4T transceivers and NPO/CPO moving closer to commercialization, with shipments likely to start from 2027F. Nomura expects the transition to raise technology barriers across active and passive components, electronic chips, PCB/CCL and thermal-management materials, potentially strengthening leading suppliers relative to smaller players. NPO/CPO and scale-up networking should also increase demand for ferrules, connectors, isolators, filters and fiber-array units. FAU demand for data-center optical interconnect is estimated at 160mn units in 2026E and expected to grow by more than 80% year-on-year in 2027E, against total supply capacity of about 170mn units annually. Silicon photonics is expected to gain further penetration because of lower cost and improved performance, but Nomura highlights 400G-per-lane performance as a critical obstacle. TFLN is viewed as an important material path for next-generation SiPh chips and modulators because of its high electro-optic coefficient, low drive voltage, low loss and high linearity. The report also cites growing InP-substrate demand: Yole forecasts roughly 2mn 4-inch-equivalent units in 2026E, 2.5-2.8mn in 2027E and 4-5mn in 2028E, while suppliers expand capacity amid demand exceeding supply. Specialty fiber is another beneficiary of AI data-center buildout, in Nomura's view. Global data-center fiber demand grew 75.9% year-on-year in 2025 and is forecast to reach 91.6mn core km in 2026E, up 32%, then 128mn core km by 2030E; AI-related applications are expected to account for more than 70%. Tight fiber-preform supply has supported a volume-and-price upcycle: G.652.D bare-fiber spot prices reached CNY83.4 per core km in March 2026, up 165% from early 2026 and 418% year-on-year, while G.657.A2 fiber for AI data centers rose from CNY32 per core km in 2025 to CNY240 in March 2026, a 650% increase. Hollow-core, polarization-maintaining and bend-resistant fibers are presented as technologies that increase performance requirements and strengthen the bargaining position of leading manufacturers. Nomura highlights InnoLight, Accelink, TFC and Shenzhen T&S as preferred optical-communications companies exposed to the global AI-infrastructure value chain. It specifically suggests monitoring new NPO/CPO solutions from InnoLight and Accelink, including Accelink's 800G L-band coherent module, which is intended to expand usable spectrum and raise single-fiber capacity from 25.6T to 51.2T in scale-across applications.

Analysis framework

Nomura previews CIOE exhibitors and products, then traces AI-networking demand through chips, modules, optical components, fiber, materials and manufacturing equipment. It combines product-roadmap evidence with supply constraints, demand forecasts, pricing data and company-reported development milestones to assess where technology upgrades may affect the optical-communications chain.

Methodology notes

• Industry AnalysisSupply-demand framework

  Supply-demand assessment of optical chips, transceivers, FAUs, fiber and InP substrates.

  The report links AI-networking demand with capacity, yield and material constraints to explain shortages, pricing and competitive positioning.

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Optical-communications value-chain analysis.

  Nomura follows the NPO/CPO transition from optical engines into components, chips, PCB/CCL, thermal materials, connectors and specialty fiber.

• Valuation methodsP/E and PEG Valuation

  Price-to-earnings valuation for individually covered companies in the issuer disclosures.

  The report's company-specific target-price disclosures use earnings multiples applied to forecast EPS or historical/sector median P/E benchmarks.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• InnoLight (300308 CH)

  Preferred optical-communications player exposed to the global AI-infrastructure value chain.

  Strengths

  Named by Nomura as a preferred player; highlighted as a supplier to watch for new NPO/CPO solutions.

  Risks

  Weaker-than-expected high-end optical-module demand, competition, slower product upgrades and export-related price pressure are cited in its issuer-specific disclosure.

• Accelink (002281 CH)

  Preferred optical-communications player and exhibitor of NPO solutions and an 800G L-band coherent module.

  Strengths

  Its L-band module is designed to expand spectrum and support a rise in single-fiber capacity from 25.6T to 51.2T in scale-across use.

  Risks

  Lower optical-component and module demand, slower optical-chip R&D, pricing competition and technology-sector sanctions are cited in its issuer-specific disclosure.

• Suzhou TFC Optical Communication (300394 CH)

  Preferred optical-communications player exposed to the global AI-infrastructure value chain.

  Strengths

  Named by Nomura among preferred players.

  Risks

  Weaker component/module demand, technology changes, customer supply-chain diversification and geopolitical risks are cited in its issuer-specific disclosure.

• Shenzhen T&S Communication (300570 CH)

  Preferred optical-communications player exposed to the global AI-infrastructure value chain.

  Strengths

  Named by Nomura among preferred players.

  Risks

  Weaker component demand, weaker CPO penetration, customer supply-chain diversification and geopolitical risks are cited in its issuer-specific disclosure.

Key data

• FAU demand for data-center optical interconnect160mn units in 2026EExpected to grow by more than 80% year-on-year in 2027E; current total supply capacity is about 170mn units annually.
• Global data-center fiber demand91.6mn core km in 2026EUp 32% year-on-year; 2025 demand grew 75.9% year-on-year and 2030E demand is projected at 128mn core km.
• G.657.A2 fiber priceCNY240/core km in March 2026Up from CNY32/core km in 2025, an increase of 650%.
• InP substrate demandAbout 2mn units in 2026EOn a 4-inch-equivalent basis; forecast at 2.5-2.8mn in 2027E and 4-5mn in 2028E.

Impact & implications

Nomura believes supply tightness and increasing technical complexity can reinforce the competitive edge of leading optical-communications suppliers. The NPO/CPO transition broadens the potential demand impact beyond transceivers to chips, components, connectors, fiber, materials and equipment.

Risks

• Lower-than-expected demand for optical components and modules from data-center and telecom markets.
• Slower-than-expected optical-chip R&D progress or product upgrades.
• More intense pricing competition and margin dilution.
• Weaker-than-expected CPO penetration, customer supply-chain diversification, geopolitical risks or worsening technology-sector sanctions.

What to watch

• CIOE 2026 product announcements for 200G EML chips, high-end DSPs, 1.6T modules and NPO/CPO optical engines.
• The timing of 3.2T/6.4T NPO/CPO commercialization and anticipated shipments from 2027F.
• Progress in SiPh performance at 400G per lane and TFLN material adoption.
• InP, EML, DSP, FAU and fiber supply conditions, capacity expansion and pricing.