Goldman Sachs raises global optical module market forecasts amid AI demand

Goldman Sachs has significantly raised its forecasts for the global optical transceiver module market, driven by the rapid expansion of AI infrastructure. The bank predicts the market size will reach $67.7 billion in 2026, $131.4 billion in 2027, and $148.5 billion in 2028, representing massive upward revisions of 33%, 81%, and 115% respectively.

This growth is fueled by the transition from single-card to rack-scale AI servers and the increasing use of custom ASIC servers, which require higher optical connectivity. The industry is shifting toward higher specifications, with rapid adoption expected for 800G, 1.6T, and 3.2T modules. Notably, the 3.2T segment is expected to account for 40% of high-speed module shipments by 2028.

Technological shifts are also prominent, with silicon photonics (SiPh) gaining traction due to its cost advantages over traditional EML solutions. Goldman Sachs expects SiPh penetration in 1.6T and 3.2T modules to reach 80% by 2028. The report also highlights Co-Packaged Optics (CPO) as an emerging long-term trend. These developments have triggered significant market activity in Chinese optical communication stocks, such as Innolight, which saw its market capitalization exceed 1 trillion RMB following the report.