Zhongji InnoLight: The demand for 800G will be higher than 200G and 400G next year.
25 Feb 2024
Yesterday, during discussions with multiple institutions, Zhongji Xuchuang disclosed that the demand and orders for the company's 800G products are continuously increasing. It is anticipated that the shipment volume of 800G in the second half of this year will significantly surpass that of the first half. The gross profit margin of 800G is higher than that of other products. Additionally, with ongoing cost reduction efforts, the company expects to maintain its current gross profit margin level.
Zhongji Xuchuang stated that the decline in shipment volume in the second quarter was mainly due to a decrease in the shipment volume of some products with speeds of 200G, 100G, and below 100G compared to the same period last year, resulting in an overall decrease in shipment volume.
Regarding traditional cloud business, the demand for 200G as a transitional solution is expected to further decrease next year as customers transition to upgrading to 400G. The demand for 200G optical modules in AI applications is expected to continue.
As for 400G, starting from the second quarter of this year, the domestic market's demand for 400G optical modules has gradually increased, largely driven by the demand for AI computing power. However, there has not been a significant increase in the demand for 400G optical modules in the domestic traditional cloud business. Benefiting from some customers choosing 400G optical modules for AI computing architecture Ethernet switches, the demand for 400G next year will increase substantially, far exceeding the demand for 400G in traditional cloud data centers.
Furthermore, according to their understanding, some AI-focused customers will continue to use higher-speed optical modules during the inference phase. Looking at the demand structure in the coming years, the demand for 800G will surpass that of 200G and 400G. By 2025, demand for 1.6T from AI customers will also be released. However, the demand for 200G and 400G is expected to decline in the long term.
Zhongji Xuchuang stated that the market penetration of silicon optical modules will be a gradual process. It is expected that the company will mass-produce 400G silicon optical modules to meet customer demand next year, but the traditional EML solution will still occupy a higher proportion. The 800G silicon optical module is currently in the verification phase, but shipments of 800G silicon optical modules will commence next year. In the era of 1.6T, the proportion of silicon optical modules is expected to increase further to reduce power consumption. Compared to the traditional EML solution, silicon optical modules have certain advantages in terms of BOM cost.
Zhongji Xuchuang stated that the decline in shipment volume in the second quarter was mainly due to a decrease in the shipment volume of some products with speeds of 200G, 100G, and below 100G compared to the same period last year, resulting in an overall decrease in shipment volume.
Regarding traditional cloud business, the demand for 200G as a transitional solution is expected to further decrease next year as customers transition to upgrading to 400G. The demand for 200G optical modules in AI applications is expected to continue.
As for 400G, starting from the second quarter of this year, the domestic market's demand for 400G optical modules has gradually increased, largely driven by the demand for AI computing power. However, there has not been a significant increase in the demand for 400G optical modules in the domestic traditional cloud business. Benefiting from some customers choosing 400G optical modules for AI computing architecture Ethernet switches, the demand for 400G next year will increase substantially, far exceeding the demand for 400G in traditional cloud data centers.
Furthermore, according to their understanding, some AI-focused customers will continue to use higher-speed optical modules during the inference phase. Looking at the demand structure in the coming years, the demand for 800G will surpass that of 200G and 400G. By 2025, demand for 1.6T from AI customers will also be released. However, the demand for 200G and 400G is expected to decline in the long term.
Zhongji Xuchuang stated that the market penetration of silicon optical modules will be a gradual process. It is expected that the company will mass-produce 400G silicon optical modules to meet customer demand next year, but the traditional EML solution will still occupy a higher proportion. The 800G silicon optical module is currently in the verification phase, but shipments of 800G silicon optical modules will commence next year. In the era of 1.6T, the proportion of silicon optical modules is expected to increase further to reduce power consumption. Compared to the traditional EML solution, silicon optical modules have certain advantages in terms of BOM cost.