100G/200G EML and CW Lasers and other high-end optical chips are in short supply, becoming a focal point of market attention. Overseas giants Lumentum, Broadcom, and II-VI monopolize over 80% of the capacity and are cautious about expanding production, leading to a shortage that is expected to last until the end of 2026. Against this backdrop, the expectation gap for domestic optical chip companies mainly arises from the triple resonance of technological breakthroughs, customer validation, and performance realization.
1. Current Shortage: The Gap Continues to Widen, Especially for High-End Products
The current optical chip market is in a state of severe supply-demand imbalance, and the tight supply situation is unlikely to ease in the short term. According to industry feedback, the core contradiction is concentrated on 800G and above high-speed products, with the main categories in short supply including:
-
100G/200G EML Chips: As the core light source for high-speed optical modules, the shortage is most pronounced
-
CW Laser Chips: Key components for silicon photonics solutions, supply remains tight
-
Indium Phosphide (InP) Substrates: Prices have surged, with the unit price of 2-inch products exceeding 12,000 yuan, an increase of 50%
-
Lithium Niobate (LiNbO₃) Materials: Significant shortages are faced for core modulator materials in 1.6T optical modules
The capacity shortage of overseas leading manufacturers has worsened, Lumentum’s capacity gap has expanded from 20% to 25%-30%, and key components such as EML and CW light sources have clearly stated they cannot meet market demand. Domestic optical module giants are forced to significantly increase their inventory, with Zhongji Xuchuang’s inventory reaching 10.9 billion yuan (a year-on-year increase of 52.64%), and the inventory growth of companies like NewEase, Huagong Technology, and LightSpeed Technology is between 30%-60%.
2. Core Reasons: Multiple Overlaps of Explosive Demand and Lagging Capacity
1. Exponential Growth in AI Computing Demand
The rapid expansion of global data centers and the explosive demand for AI training/inference directly drive the demand for high-speed optical modules. LightCounting data shows that shipments of 800G optical modules will exceed 9 million units in 2024, and demand for 1.6T is expected to reach 3-5 million units in 2025. As cluster scales expand, the ratio of GPUs to optical modules increases, further amplifying demand.
2. Dramatic Shortening of Technology Iteration Cycles
The iteration cycle for optical modules has shortened from a traditional 10 years to 4 years for data centers, and in the AI era, it has been compressed to 1-2 years for product updates. This rapid iteration makes it difficult for upstream chip companies to keep pace, significantly increasing R&D and capacity expansion pressures.
3. Severe Lag in Capacity Expansion
Optical chips adopt the IDM model, with equipment arrival and production line debugging cycles lasting 12-18 months. Although overseas giants (Lumentum, Broadcom, II-VI) control over 80% of high-end capacity, they are extremely cautious about expanding production and prioritize meeting North American market demand, leading to a larger gap in non-American markets. More critically, the co-production of multiple products further squeezes high-end chip capacity.
4. Geopolitical Factors and Supply Chain Restructuring
U.S. and Japanese suppliers are limited in their supply to domestic markets under pressure from the “entity list.” However, this has also forced domestic downstream manufacturers to actively open validation channels, accelerating the localization process.
3. Duration: Shortages Will Continue Until the End of 2026
According to LightCounting’s forecast, the shortage of EML and CW laser chips will continue to constrain market growth until the end of 2026, at which point demand may gradually ease, helping to restore supply chain balance. The industry consensus is:
-
Second half of 2024: Overseas manufacturers will start expanding production
-
End of 2025: New capacity will gradually be released
-
2026: The supply-demand gap may further widen
Looking further ahead, as 1.6T/3.2T accelerates iteration, the demand for optical chips per module will increase by more than three times compared to the 800G era, if AI computing demand continues to exceed expectations, the shortage period may be further extended.
4. Core Targets with the Greatest Expectation Gap in Domestic Market
1. SourceJet Technology (688498) – The Leader with the Greatest Expectation Gap
Core Logic: Has entered the NVIDIA GB200 supply chain, achieving a breakthrough for domestic chips in core AI computing scenarios.
-
Technological Breakthrough: High-power CW laser chips have passed NVIDIA validation and are being supplied in bulk, with 100G/200G EML chips accelerating validation
-
Performance Turning Point: Revenue in the first three quarters of 2025 reached 383 million yuan, a year-on-year increase of 115%, with a net profit of 106 million yuan turning from loss to profit
-
Capacity Expansion: The capacity of 25G DFB chips is expected to double by 2025, fully benefiting from the domestic substitution window period
-
Market Expectation Gap: The market may underestimate the strategic value and performance explosion of its entry into the supply chain of top overseas customers
2. Changguang Huaxin (688048) – IDM Manufacturer with Technology Benchmarking International Standards
Core Logic: Product performance has reached international TOP levels, and mass production capabilities ensure rapid market capture.
-
Product Progress: 100G PAM4 VCSEL and supporting PD optical chip new products have achieved mass production, with performance on par with industry leaders
-
Strategic Positioning: Aiming to become a “one-stop IDM solution provider for short-distance interconnect optical chips,” covering the entire chain from design to manufacturing
-
Market Opportunities: Under the supply-demand imbalance of high-speed optical chips, overseas manufacturers prioritize meeting North American market demand, leaving a breakthrough opportunity for non-American markets (including China)
3. Shijia Photonics (688313) – The Invisible Champion with Bulk Shipment Validation
Core Logic: 800G/1.6T products have been shipped in bulk, and overseas expansion opens up growth space.
-
Product Breakthrough: MT-FA products for 800G/1.6T optical modules have been shipped in bulk, and CW light sources have completed customer validation and small batch delivery
-
Overseas Layout: Expanding production through a subsidiary in Thailand to directly meet the growing demand in international markets
-
Stable Supply Advantage: In the context of unstable supply from overseas giants, it has a supply chain security advantage
Expectation Gap Ranking
Copy
| Company | Core Expectation Gap | Short-Term Explosive Power | Certainty |
|---|---|---|---|
| SourceJet Technology | Has entered NVIDIA supply chain | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐ |
| Changguang Huaxin | Mass production of high-end products + IDM model | ⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ |
| Shijia Photonics | Bulk shipments + overseas expansion | ⭐⭐⭐⭐ | ⭐⭐⭐⭐ |
5. Summary of the “Three Major Players”
The “three major players” in optical chips, SourceJet Technology, Shijia Photonics, and Changguang Huaxin, each have their characteristics in terms of technology routes, product layouts, and market shares: • SourceJet Technology: Focused on the R&D and production of optical chips in the optical communication field, it is a leading domestic high-speed optical chip enterprise. The company adheres to the IDM model, with a product line extending from 2.5G to 200G, achieving full coverage of products such as DFB and EML. It has made substantial breakthroughs in 100G and 200G EML laser chips, breaking the monopoly of Europe and the United States, and has achieved bulk sales to domestic and foreign customers, with related products already laid out for new technologies such as CPO and OIO. In 2024, the optical chip business of SourceJet Technology is expected to account for nearly 100% of total revenue, with high growth expectations due to the explosive demand for optical chips in data centers and other fields. • Shijia Photonics: One of the important suppliers of optical chips and devices both domestically and internationally. In 2012, Shijia Photonics successfully developed PLC chips, ending the monopoly of foreign companies on this product, and by 2015, its global market share exceeded 50%. The company has established a complete IDM full-process production line and completed key layouts in the gigabit network era. In response to the new generation of technology demands such as 800G, 1.6T, and CPO, it is accelerating the promotion of CW DFB and EML chips, as well as developing connector products integrated with PLC and AWG, building a domestic solution for ultra-high-speed fields. • Changguang Huaxin: A rare IDM manufacturer of semiconductor laser chips in China, focusing on the R&D, design, and manufacturing of semiconductor laser chips, establishing two major material systems of GaAs and InP. Its products mainly include high-power single-tube series, high-power bar series, high-efficiency VCSEL series, and optical communication chip series. The company has completely independent and controllable chip design, MOCVD (epitaxy), FAB wafer processing, and mass production line capabilities, making it one of the few IDM semiconductor laser enterprises globally with key process production capabilities such as 6-inch epitaxy and wafer manufacturing. Its 56G PAM4 EML high-speed chip was successfully launched in May 2023, officially entering the high-end optical chip market.
Investment Logic Summary
The current greatest expectation gap lies in the market possibly underestimating the speed and depth of domestic optical chips entering top overseas supply chains. This round of shortages is not only a cyclical issue but also a historic opportunity catalyzed by the explosive demand for AI computing, geopolitical factors, and technological breakthroughs. Domestic optical chip companies are transitioning from the “replacement introduction period” to the “performance release period,” especially for companies like SourceJet Technology, which have already obtained the “entry ticket,” their performance elasticity will far exceed market expectations.
(More detailed individual stock research to follow)