AAOI: Optical Module Industry Returns to the US

Overview of the Optical Module Industry

Key Insights

• Market Leaders: Mainstream optical module manufacturers like Innolight, Eoptolink, and Finisar are expected to maintain dominant market positions in 2025. Eoptolink, in particular, is projected to achieve a notable increase in market share compared to 2024.

• Technology Challenges: The 200G EML optical chip is anticipated to become a critical bottleneck for 1.6T optical module shipments in the upcoming year. However, silicon photonics is expected to see accelerated adoption during the 1.6T transition period.

• Chinese Manufacturers: Companies such as Source Photonics and Cambridge Industries Group have yet to directly supply 800G/1.6T high-speed optical modules to major CSPs. In 2025, Cambridge is expected to deliver 600,000–800,000 units of 400G and 800G optical modules to Cisco. Currently, Source Photonics' primary customers for 800G modules are Juniper and FS.COM, but it has not yet secured a position in Microsoft's supply chain.

• AAOI (Applied Optoelectronics Inc.): AAOI is estimated to ship nearly 2 million units of 400G optical modules in 2025, with allocations of 500,000 to Microsoft, 800,000 to Oracle, and 500,000 to AWS. Additionally, it is expected to ship 300,000–400,000 units of 800G modules, with 200,000 going to Oracle and 100,000–200,000 to Microsoft. AAOI's optical module revenue is projected to reach $700 million in 2025.

Industry Landscape of Optical Modules

The optical module industry is expected to maintain a competitive and dynamic landscape through 2025. Leading players such as Innolight, Eoptolink, and Finisar are poised to retain dominant market positions, with Eoptolink projected to achieve a notable increase in market share compared to 2024.