The optical chip industry is currently at a critical development stage driven by both technological upgrades and market demand. Domestic companies are facing a “domestic substitution” window period, but they also need to overcome technological bottlenecks and supply chain challenges. The following suggestions are proposed from four dimensions: technology, market, competition, and industry chain.
1. Technological Breakthroughs: Focus on High-End and Emerging Technologies
1. Accelerate the localization of high-end chips – Establish a collaborative research and development consortium for optical chips above 25G (such as 100G EML and silicon photonic chips), focusing on core processes such as epitaxial growth and wafer manufacturing. This can draw on Huawei’s “HiSilicon model” to achieve a technological closed loop through long-term R&D investment.
– Pay attention to thin-film lithium niobate modulators and CPO (Co-Packaged Optics) technology, where the domestic and international gaps are relatively small, and there is potential for a leapfrog development.
2. Layout for Next-Generation Technologies – Invest in silicon photonic technology (CMOS-compatible processes) and indium phosphide integrated chips to reduce power consumption and size, adapting to the demand for 1.6T optical modules.
– Explore cutting-edge fields such as optical computing and quantum communication, for example, the application of photonic neural network chips in AI acceleration.
2. Market Strategy: Bind Major Clients and Expand New Scenarios
1. Capture the upgrade dividends of data centers – Collaborate with leading cloud providers (such as Alibaba Cloud and AWS) to develop customized optical modules that meet the needs for high speed (1.6T) and low latency in AI computing clusters.
– Enhance influence by participating in the formulation of industry standards (such as OIF, IEEE).
2. Develop Incremental Markets – Automotive LiDAR: Develop automotive-grade products in collaboration with car manufacturers to meet the demand for 1550nm wavelength laser chips.
– Medical Sensing: Utilize silicon photonic technology to develop low-cost, high-precision biosensors.
3. Competitive Pathways: Differentiation Breakthrough
1. Specialization in Niche Markets – Small and medium-sized enterprises can focus on narrow linewidth lasers (used for coherent communication) and DFB laser chips (used for 5G front-haul) to avoid direct competition with international giants.
2. Domestic Substitution 2.0 Strategy – Shift from “replacing low-end” to “penetrating mid-to-high-end”: prioritize supplying equipment manufacturers like Huawei and ZTE, gradually entering the supply chains of overseas second-tier operators.
– Leverage cost advantages (domestic industrial chain support) and rapid response capabilities (international manufacturers have delivery cycles of 18 months or more).
4. Industry Chain Collaboration: Build a Local Ecosystem
1. Upstream Material Autonomy – Collaborate with wafer manufacturers (such as SMIC) to develop dedicated production lines for indium phosphide and silicon photonics, reducing dependence on substrate suppliers like Sumitomo in Japan.
– Invest in supporting industries such as photoresists and specialty gases to mitigate risks from U.S. export controls.
2. Vertical Integration in Mid and Downstream – Leading manufacturers can acquire packaging and testing companies (such as LightSpeed Technology) to achieve integrated delivery of “chips and modules”.
– Establish a shared foundry platform (similar to TSMC’s model) to solve manufacturing bottlenecks for small and medium design firms.
In summary, the next 3-5 years will be a critical phase for the domestic optical chip industry to transition from “catching up” to “running alongside”. It is essential to focus on high-end technological breakthroughs, application scenario innovations, and industry chain clustering to seize market share amid the explosive demand for AI computing and autonomous driving. Policy support for first-set procurement and wafer fabrication subsidies should continue, while companies need to avoid low-end competition and upgrade to high-margin segments.
Recommended companies to watch: Yuanjie Technology、Shijia Photonics、Changguang Huaxin、Guangku Technology、Yongding Co., Ltd.等。