Industry scale: the global market scale of optical modules has increased, and the domestic share has continued to increase
Lightcounting predicts that from 2022 to 2024, the global optical module market will be US $107.65/119.56/13.262 billion respectively, with a year-on-year increase of 16.09% / 11.06% / 10.92%. According to the data of lightcounting in January 2021, the global market share of domestic optical modules increased by an average of 3.1% per year from 2010 to 2021 and exceeded 50% in 2021. According to the relevant data of lightcounting, the scale of China’s optical module industry in 20222024 was US $5.427/63.64/7.432 billion respectively, with a year-on-year increase of 22.95% / 17.25% / 16.78% respectively, higher than the growth rate of global market scale.
Market structure: the high-end module drives the rapid growth of the digital communication market, and the growth of the telecom market tends to be stable
According to the statistics and forecast data of lightcounting, the market size of Ethernet, cwdw / DWDM and AOC / DAC segments increased by 21% year-on-year in 2021. From 2022 to 2024, the global Ethernet optical module market size reached US $5632 / 6258 / 6814 million respectively, of which the total share of 100g and above reached 89% / 91% / 93% respectively. The total share of 400g and above reached 34% / 40% / 48% respectively. The growth of 5g and wired access market dominated by telecom operators is weak. Lightcounting predicts that the year-on-year growth rate of Telecom access optical module market from 2022 to 2024 will be 1.71% / 0.87% / – 4.39% respectively.
Chinese Enterprises: increase and expand production to strengthen high-end production capacity, merge and acquire self-developed chip short boards
Since 2020, Chinese optical module manufacturers such as Zhongji Innolight Co.Ltd(300308) , Eoptolink Technology Inc.Ltd(300502) , Huagong Tech Company Limited(000988) , Broadex Technologies Co.Ltd(300548) and others have expanded their production respectively, with a total annual output of newly increased end optical modules exceeding 7 million, exceeding 10% of the global Ethernet optical module shipment in 2020. Chinese optical module enterprises improve the upstream optical chip design capability, optimize the industrial layout, and improve the supply capacity and profitability through self-research or acquisition Eoptolink Technology Inc.Ltd(300502) , Accelink Technologies Co.Ltd(002281) and other enterprises have benefited from the increase in the proportion of high-end optical module business and the advantages of industrial layout. Since 2020, the gross profit margin has continued to increase.
Investment advice
From 2022 to 2024, thanks to the large demand for 200g and 400g optical modules and the large-scale deployment of 800g optical modules, the global optical module market is expected to continue to grow. After 100g-400g technology accumulation, Chinese optical module enterprises have begun to have a first mover advantage in R & D and production of 800g optical modules, and the market share is expected to continue to grow. We are optimistic about the growth of the domestic optical module industry. In the short term, the head manufacturers have sufficient orders and the performance growth is fulfilled; In the medium term, China’s high-end production capacity has reached production capacity and its market share has increased; In the long run, the industrial layout of Chinese manufacturers is becoming more and more perfect, and the profitability is improving. The companies we recommend include: Zhongji Innolight Co.Ltd(300308) , Eoptolink Technology Inc.Ltd(300502) , Accelink Technologies Co.Ltd(002281) , Huagong Tech Company Limited(000988) , Broadex Technologies Co.Ltd(300548) .
Risk tips
Systemic risk, the risk that the digital communication market is less than expected, the risk of photoelectric chip supply chain and the risk of intensified market competition.
