Galaxy Securities: Soaring Computing Power Demand Fuels Optical Module Upgrades and Value Reassessment

Galaxy Securities has released a research report indicating that the optical communications industry is undergoing a significant structural transformation driven by the explosive demand for AI computing power. The sector's prosperity is shifting from traditional cyclical fluctuations to a long-term expansion phase, supported by technological iteration and capital expenditure. Major global cloud providers and AI companies are consistently increasing their investments in computing infrastructure, leading to non-linear growth in demand for high-speed optical modules. The report projects that starting in 2026, high-speed products will see accelerated penetration in the data communications sector. The 1.6T product is already entering its mass delivery phase, with strong demand providing a solid fundamental basis for capacity expansion and profit realization across the industry chain. As the certainty of high demand growth increases, capacity expansion has been improving quarter by quarter since the beginning of the year. Although shortages of upstream raw materials persist, the situation is expected to gradually ease with the ongoing progress of domestic substitution.