DeepSeek's Low - Cost AI Model Spurs Demand for Optical Communication: Optical Transceiver Module Shipments to Soar 56.5% in 2025

In the ever - evolving landscape of technology, the emergence of DeepSeek's low - cost AI model is set to trigger a significant upsurge in the demand for optical communication. This development is not only revolutionizing the way data is processed and transmitted but also having a profound impact on the global market of optical transceiver modules.

The DeepSeek model, with its cost - effective nature, has the potential to expand the application scenarios of AI. This expansion, in turn, is expected to drive up the construction of data centers worldwide. Optical transceiver modules, the linchpin of data center interconnection, are poised to benefit greatly from the escalating need for high - speed data transfer.

In the future, data transmission between AI servers will rely heavily on a vast number of high - speed optical transceiver modules. These modules play a crucial role in converting electrical signals into optical signals for transmission through optical fibers and then reversing the process upon reception. According to the statistics of TrendForce, a globally renowned market research institution, the global shipments of optical transceiver modules with speeds of 400Gbps and above were 6.4 million in 2023. In 2024, this figure reached approximately 20.4 million, and it is projected to exceed 31.9 million in 2025, representing a year - on - year growth rate of 56.5%.

TrendForce points out that DeepSeek, in collaboration with cloud service providers (CSPs) and AI software developers, will jointly promote the widespread adoption of AI applications. In particular, the future will witness a substantial amount of data being generated at the edge, which implies that fields such as factories and wireless base stations will need to install numerous micro - data centers. By deploying optical transceiver modules in a dense manner, it is anticipated that the number of optical communication nodes in each factory will increase by 3 to 5 times compared to traditional architectures.

Optical communication offers distinct advantages over traditional electrical signal transmission. With its higher bandwidth, lower latency, and reduced signal attenuation, it can meet the stringent requirements of AI servers for high - performance data transfer. As a result, optical communication technology has become an indispensable part of AI servers. The demand for AI servers continues to fuel the growth of 800Gbps and 1.6Tbps optical transceiver modules. Moreover, the upgrade of traditional server specifications has also driven the demand for 400Gbps optical transceiver modules.

Optical transceiver modules consist of several key components, including the Laser Diode, the Modulator, and the Photo Detector. The Laser Diode is responsible for generating optical signals, the Modulator for modulating electrical signals onto optical signals, and the Photo Detector for converting received optical signals back into electrical signals.

In the supply chain of laser light sources, EML lasers, which come with modulation capabilities, are highly challenging to produce due to their complex technology. Given the current high - speed transmission requirements, where single - channel optical transmission speeds need to reach 100Gbps or even 200Gbps in some cases, the entry barrier is relatively high. Currently, the major suppliers are mostly large companies from the United States and Japan, such as Broadcom, Coherent, and Lumentum. These companies rarely outsource their production.

In the case of CW lasers in silicon photonics modules, as the functions of optical modulation and wavelength division of the laser have been integrated into the silicon photonics (SiPh) process, only the light source needs to be provided. This has allowed some manufacturers to enter the CW laser foundry supply chain. For example, Lien Ya has been manufacturing CW lasers for major international data center companies, while manufacturers like Huaxing Optoelectronics and Guanghuan have combined laser chip manufacturing processes for foundry services.

In the supply chain of photo detectors, the major suppliers are predominantly the existing large US and Japanese companies in the laser light source field, such as Broadcom, Coherent, Lumentum, and Hamamatsu. However, as the transmission speed of optical modules increases to around 200Gbps, the challenges for photo detectors are also mounting. The performance of a photo detector depends on its light - receiving sensitivity. Therefore, factors such as the uniformity of doping in the epitaxial material or structural defects can significantly affect the light - receiving effect. Currently, for 200Gbps Per Lane APD (Avalanche Photodiode) photo detectors, while Broadcom manufactures them entirely in - house, Coherent outsources the epitaxy of its 100Gbps APDs, and Lumentum, Hamamatsu and other major manufacturers outsource the epitaxy of their 200Gbps APDs to the US - based IET.

The development of DeepSeek's low - cost AI model is like a ripple that has spread across the technological ocean, causing waves of change in the optical communication market. The increasing demand for optical transceiver modules not only reflects the growing needs of the AI era but also indicates the continuous evolution of the entire data transmission industry.

As the application scenarios of AI continue to expand, the requirements for data center construction and data transmission are becoming more and more stringent. Optical transceiver modules, with their unique advantages, will play an even more important role in this process. The competition in the supply chain of each component of optical transceiver modules also reflects the complexity and dynamism of the entire industry.

The major US and Japanese manufacturers, with their technological advantages, have firmly established themselves in the high - end market of laser light sources and photo detectors. Their long - term investment in research and development and strict control over production processes have enabled them to maintain a leading position. However, the entry of some new players into the CW laser foundry supply chain shows that there is still room for innovation and competition in the industry.

For emerging manufacturers, seizing the opportunity presented by the growing demand for optical transceiver modules requires continuous investment in technology research and development. They need to improve their manufacturing processes, enhance product quality, and strive to break into the high - end market.

In conclusion, the relationship between DeepSeek's low - cost AI model and the optical communication market is an interactive and symbiotic one. The development of the AI model drives the demand for optical communication products, while the continuous innovation and development of the optical communication industry provide strong support for the further expansion of AI applications. As we move forward, the trends in the shipments of optical transceiver modules and the evolution of the supply chain of their components will continue to be important areas of focus for both industry insiders and investors alike. The technological advancements and market dynamics in this field will undoubtedly bring more surprises and challenges in the years to come, shaping the future landscape of the global technology industry.