Goldman Sachs on the Optical Communications Network Industry: Three Investor Debates on the Potential US Restriction of Chinese Optical Module Imports
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Goldman Sachs addresses investor discussions around potential US import restrictions on Chinese optical modules. It argues that amid rapid technology iteration, strong AI demand, tight raw material supply and deep customization, cloud providers struggle to diversify AI server supply chains and are becoming more dependent on incumbent leaders. Seven of the world's top ten optical module suppliers by revenue are based in China and gained further share in 2025. Leaders combine strong capacity commitments, automation and manufacturing efficiency with diversified production across Southeast Asia, notably Thailand—Eoptolink is expanding its Thailand phase-two capacity in 2026 with phase one already at full utilization. The global optical module market is projected to grow from US$34.211bn in 2025 to US$50.883bn in 2026 and US$72.593bn in 2027. Upgrades to 1.6T and above require more fibers and lasers within the same module footprint, raising coupling and thermal challenges that smaller players struggle to match, while silicon photonics is expected to rise from 28% of the material mix in 2025 to 43% in 2026. By 2028, 800G, 1.6T and 3.2T products are seen at 8%, 10% and 5% of total shipments respectively. Buy-rated names include Eoptolink (price Rmb399.60), FOCI (price NT$640.00), LandMark (price NT$2,535.00), RoboTechnik (price Rmb488.18) and VPEC (price NT$384.50).