Research On Optical Communication Industry
Oct 12, 2022| China market: the upstream is in urgent need of breakthrough, and the downstream alternative advantages are gradually emerging
We believe that China's optical communication manufacturers have risen rapidly in recent years, but the upstream chip end is still dominated by overseas manufacturers. The core chip self making ability is an urgent problem in the optical communication industry. Therefore, the domestic chip localization rate has developed rapidly in recent years. According to the China Optoelectronic Device Technology Development Roadmap (2018-2022) released by the Ministry of Industry and Information Technology in 2018, by 2022, it is expected that the localization rate of domestic low-end optoelectronic chips will exceed 60%, and the localization rate of high-end optoelectronic chips will exceed 20%.
The downstream application drive is strong, and the datacom market is booming
Downstream applications drive market expansion
According to Lightcounting's prediction, the market size of optical modules will keep growing by CAGR 14% in the next five years, and is expected to reach 17.6 billion dollars in 2026. Benefiting from the construction of data centers and the in-depth layout of 5G networks, China's optical module market is also expected to further grow. Yole predicted that the size of China's optical module market is expected to reach 3.3 billion dollars in 2022, an increase of 22% year-on-year. In the telecom market, CWDM/DWDM will become the main driving force in the future. According to Lightcounting quoted in the prospectus of Yuanjie Technology, it is estimated that the telecom market size will reach 3.355 billion dollars in 2025.
Application of optical communication devices: 5G bearer&fixed network access&data communication
According to the downstream application fields, optical communication devices are mainly used in the telecommunications market and data communication (wireless+fixed network access) market. According to Lightcounting's prediction, from 2020 to 2026, the data communication market will grow from 5.3 billion dollars to 15.1 billion dollars, with a CAGR of 19%; The telecom market will grow from 4.3 billion dollars to 5.8 billion dollars, and the CAGR will be 5%. The growth of the data communication market will become the main driving force of the optical module market. In the telecommunications market, according to different speeds and transmission distances, networks are mainly divided into access networks, metropolitan area networks and backbone networks, among which access networks include fixed network access and wireless access.
Application scenario of optical module: 5G bearer&fixed network access&data communication
The 5G bearer network is generally divided into metropolitan area access layer, metropolitan area convergence layer, metropolitan area core layer/provincial trunk line to realize the forward transmission and intermediate transmission of 5G services. The devices at each layer mainly rely on optical modules to achieve interconnection.
"Broadband China" promotes the construction of optical fiber networks. FTTx optical fiber access is one of the scenarios with the largest use of optical modules in the world, and China is the main driver of the FTTx market. Restricted by the bandwidth limitation of electronic communication devices, the loss is large and the power consumption is high, operators gradually replace the copper network to the optical network. PON technology is one of the best technical solutions to realize FTTx. The current mainstream EPON/GPON technology uses 1.25G/2.5G optical chips and is transitioning to 10G optical chips.
In the data center architecture, the connection between servers, the connection between switches, and the connection between servers and switches all require optical modules, optical fiber jumpers and other transmission carriers to achieve data interoperability. With the rapid development of cloud computing, big data, ultra-high definition video, artificial intelligence, 5G industry applications, etc., network access frequency and access means are increasing, and network data traffic is growing rapidly, which puts forward higher challenges for data center interconnection.