The Zhitong Finance App learned that Guosheng Securities released a research report stating that overseas tech giants continue to increase AI computing power, and that the “computing-communication-storage” system under the next generation B100 is about to be iterated. As a core sector in the AI computing power industry chain, there is already a boom transmission and spread. Therefore, while closely monitoring the commercial performance progress of leading manufacturers, the current focus should also be on the upward trend in the optical device industry chain.

Guosheng Securities pointed out that outside of optical modules, optical interconnection solutions have spawned various solutions along with the demand for AI supercomputing. The core requirements are expandability, high density, and low cost. The optical module progresses from 400G to 800G and 1.6T, and pursues the highest speed in a single lane, while the iterative idea of the optical interconnection scheme pursues widening lanes to accommodate more highways, and at the same time pursues flexible path allocation for different lanes to facilitate network topologies.

Taking MPO connectors as an example, they have strong scalability (from 12 cores to hundreds) and compatibility (can be used by digital communication and telecommunications), which is conducive to shortening the construction time and cost of optical interconnection systems in AI computing power construction and expansion projects; flexible boards target optical interconnection routing scenarios, breaking the one-to-one inflexibility of traditional optical module connection schemes and enabling flexible scheduling and distribution of optical channels. The MPO market is mainly overseas players. As demand is expected to spill over, it is expected that domestic manufacturers specializing in optical connectivity, such as Taichenguang and Zhishang Technology, will receive an increase in orders. Currently, due to the supply of upstream devices, the production schedule has been extended.

Within optical modules, it has been confirmed that demand for optical chips is strong, and “explosion orders” for passive devices can be expected. At the beginning of this year, chemical company AXT said at a performance briefing that demand for indium phosphide (used in EML) and gallium arsenide (used in VCSEL) was good, and there was sufficient order continuity. Passive devices are diverse and have a low individual value. They involve various materials such as glass, metal, and ceramics. Industry companies usually expand their categories by “expanding the product line”, and some core devices still rely on imports.

In this 800G-1.6T cycle, demand for passive devices will explode and require innovation in materials and solutions. Excellent companies will stand out and overtake corners in the upward cycle. For example, Z-Block wave-division multiplexing components, aspheric lenses, and other varieties that have not received sufficient attention in the market before are worth focusing on.

Investment advice:

Q2 The photovoltaic device sector's performance release accelerated. The market has seen the performance of optical modules explode, and there are many types of upstream devices and materials in the optical communication industry chain. As downstream volume is released, device-side performance release is expected to accelerate. In terms of performance, it is expected that the “second-tier” optical device leaders will gradually release their performance in Q2 and after this year, including Tengjing Technology (688195.SH) (mainly engaged in aspherical lenses, Z-block components, and filters within optical modules), Tichenguang (300570.SZ) (holding Tecilu, mainly engaged in MT inserts and coating devices), and Zhishang Technology (301486.SZ) (holding Fukexi, involved in MPO and MT inserts).

Risk warning: AI development falls short of expectations, computing power demand falls short of expectations, market competition risks.