On April 18, Guosheng Securities issued a research report highlighting that Photonic Integrated Circuits (PICs), the cornerstone of silicon photonics technology, are steering the industry's value proposition towards design and manufacturing processes, poised to redefine the profit distribution landscape within the sector. From an application perspective, PICs are catalyzing the expansion of optical interconnectivity from traditional data center scale-out scenarios to encompass scale-up scenarios as well. This transformation is extending the market reach from medium- to long-distance, equipment-level applications to short-distance, chip-level implementations.

Currently, propelled by the burgeoning demand for optical communication spurred by advancements in AI, the need for optical modules and engines has skyrocketed from the millions to the tens of millions, with projections indicating a potential leap to hundreds of millions in the foreseeable future. Considering factors such as production capacity, cost-efficiency, and power consumption, the industry supply chain is in dire need of innovative production capacities to keep pace with this escalating demand.