Optical Module Expert - Regarding Opticacal Module Progress, Orders, and Guidelines

Optical Module Expert - Regarding Optical Module Progress, Orders, and Guidelines

SEVEN Research Summary 2023-05-28 07:01 Published in Shanghai

The general outlook for the optical module industry mainly comes from the bidding in October every year

Last year, 2022 was the original year for 800G optical modules

At that time, the bidding volume was 10W units of 800G optical modules

From 8W Google 2W NVIDIA

Winning bidder: Relay Xuchuang-9W Finisar - nearly 1W (several thousand)

At present, Xuchuang is the exclusive leader in technology, and Finisar is considered the second largest competitor in China, generally lagging behind by about 4-8 months

Only Xuchuang's 800G mass production and shipment have already passed verification

The verification process for 800G - sample delivery - testing for high and low temperature limit conditions, packet loss rate, optical error, etc., takes approximately 5000 hours. After this verification, it takes six months to gradually improve the qualification rate. The final testing process is - small batch compatibility. Due to the poor compatibility of optical modules, large factories usually only seek 1 to 3 manufacturers for supply. The main reason is that finding too many manufacturers for compatibility can lead to significant compatibility issues

Each progress:

Xuchuang - Full Mass Production (G N), with two suppliers and one supplier occupying the majority of the signed orders. Currently, approximately 80W 800G Metas may require insertion in Q3

Finisar - Full mass production (G N) of equipment with insufficient secondary supply capacity in the second half of the year or next year (Wuxi+Malaysia factories)

New Yisheng - bound vendor A has no guidance, and M only needs the final compatibility test. The bidding in October may enter M

Tianfu Communication - NVIDIA wants to make its own optical modules (not too large without the ability of Xuchuang), which has become its third supplier. We are looking for cooperation and support from Tianfu, and the revenue has increased significantly in the second half of the year. There are orders available

Cambridge - The advantage of sample delivery lies in the fact that the two companies, the United States and Japan, were once the top ten optical module manufacturers. Foreign manufacturers have been paying attention to them for a long time, but the disadvantage is that the overseas processing costs are too high (which can be solved very well). They have good relationships with Arista and others, and have indirectly entered the market

Liante has sent samples, and the product array of Mr. Xiao, who has dug up talent, is very good. The main reason is that he entered the data communication industry relatively late and lacked technical accumulation

Huagong - sent the sample, but there should be no background issue

Guangxun - The sample was sent, but it shouldn't have worked. It's still due to background issues

Orders for 2023: Currently, based on the increase in orders, the outlook is for 120-140W 800G optical modules throughout the year (but there is a high probability of more)

At the beginning of 2023, the official guidelines for the comprehensive supply of 800G optical modules by major manufacturers for the entire year were 60W, 70% for Google, and 30% for NVIDIA

And since March when only orders were added for 10W, the guidance has been increasing upwards

Afterwards, an additional order of 13W units will be placed in April

Currently, the additional order guidelines are for Google 45W and 15W, totaling 60W Nvidia 50W units (released in July and August)

There is also an LPO volume of approximately 7-8W, with only Meta being the main manufacturer that favors LPO. The rest are on the sidelines

LPO relative to EML-800G