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with the iteration of automatic generation models such as sora and o1, data traffic has entered a period of rapid development. balancing the needs of high bandwidth, long distance, low cost, and low power consumption has become an important choice for optical module manufacturers to design data communication modules. on september 23, at the ecoc2024 european optical fiber communication exhibition, hgz-source, a subsidiary of hgtech (000988), released the next-generation dci scenario 800g zr/zr+ osfp packaging solution and demonstrated the performance of the new product on site.

previously, at the ofc2024 exhibition, hgzy has released and dynamically demo 800g zr/zr+ qsfp-dd packaging solutions, participated in the oif 800zr plugfest test event and achieved excellent test results.

hgz said that it has launched 800g qsfp-dd/osfp zr/zr+ coherent optical modules for long-distance transmission in the dci field. the core indicators are higher than the industry specifications, and the margin is sufficient. in particular, the world's first dynamic demo 800g zr complies with the oif 800zr standard, supports ofec, and supports four modes: 800ge, 2*400ge, 4*200ge, and 8*100ge. the module supports +4dbm high output optical power; in the absence of an external optical amplifier, it can directly transmit 120km point-to-point, effectively realizing ultra-long-distance transmission of the dci optical layer without installing a relay amplifier.

since last year, benefiting from the ai ​​boom, the optical module field has been booming. in the first half of this year, hgtech achieved operating income of 5.2 billion yuan, a year-on-year increase of 3.51%, and net profit attributable to the parent company of 625 million yuan, a year-on-year increase of 7.4%.

for the optical module industry, the explosion of downstream demand is an important condition for starting a new round of upward cycle. lightcounting, an optical communication market research organization, said in a report that google's parent company alphabet and microsoft's capital expenditures in the second quarter hit record highs, increasing by 91% and 55% respectively. in addition, amazon and meta's capital expenditures increased by 54% and 36% respectively. however, apple's spending increased slightly, only 3%. these investments are mainly used in cloud data centers and artificial intelligence infrastructure, including not only servers, gpus and cpus, but also optical connections.

benefiting from the rapid expansion of computing power clusters, long-distance high-speed transmission such as data center interconnection has attracted widespread attention, and hgte has also accelerated its layout in this field.

in 2023, hgtech launched 400g zr/zr+/zr+pro series coherent optical modules and won orders in north america. in march this year, hgtech showcased 800g qsfp-dd zr/zr+ pro coherent optical transceivers at ofc2024, and jointly with marvell, a world-class dsp manufacturer, released the next-generation 800g transmitter retimed optics (tro) solution.

samuel liu, senior director of product line management at marvell, said at the show: "800g is a turning point for dci because it enables data centers to replace expensive traditional equipment with pluggable modules for connections of 500 kilometers and beyond."

ai demand drives the continuous upgrading of optical module technology, and silicon photonics is also one of the important development directions. hgtech has previously stated that silicon photonics is a good starting point for 800g. currently, the pressure on upstream eml and vcsel is relatively high. silicon photonics is one of the main solutions for 800g. it is expected that silicon photonics will be the mainstream solution for 1.6t optical modules.

citic securities pointed out in its latest research report that the release of the openai o1 model proves the importance of inference measurement to model performance, and is expected to accelerate the deployment of inference measurement computing power in the future. at the same time, due to the low-cost requirements of inference scenarios, high-speed, low-power optical modules are expected to become mainstream, such as silicon photonics, lro/lpo/cpo technologies may be accelerated.

at the performance briefing held in august, hgte stated that the full range of 400g and below optical modules have been delivered on a large scale and have entered into the hands of multiple overseas channel manufacturers; the 800g lpo products have been officially sampled to multiple leading customers, and the testing is progressing smoothly. it is expected to be completed in the fourth quarter and will be carried out in small batches/large quantities; the 1.6t series products are expected to be officially sampled in august, and the overall progress is currently in the first echelon of the global industry.

although there are voices from the outside world that "the progress of hgtech's optical module products is slower than that of leading companies", hgtech said that the demand for datacom optical modules from domestic internet and equipment manufacturers has increased rapidly and will maintain substantial growth next year. the company has an advantageous share in this demand. currently, the full range of 400g and below optical modules are being delivered on a large scale, and 800g optical modules will be produced in batches starting in the fourth quarter. it is expected to become the largest domestic high-speed optical module supplier within the year.