Research: AI Optical Interconnect Prompts US Firms to Expand Southeast Asia Outsourcing, Taiwanese Manufacturers Seize Orders
According to TrendForce, the AI optical interconnect market opportunity will drive US companies to expand outsourced production in Southeast Asia, allowing Taiwanese manufacturers with factories in the region to capture orders from non-Chinese supply chains. Global optical transceiver module shipments are projected to more than triple from 26.5 million units in 2023 to 92 million units in 2026.
📋 Article Processing Timeline
- 📰 Published: May 5, 2026 at 23:09
- 🔍 Collected: May 5, 2026 at 23:31 (22 min after Published)
- 🤖 AI Analyzed: May 6, 2026 at 00:07 (35 min after Collected)
ASEAN Financial Special Report (Total 300 articles)
Central News
Seize the New Southbound Policy, focus on the economic pulse of ASEAN. Central News Agency's "Southeast Asia Financial Information Network" daily selects multiple financial headlines from Thailand, Vietnam, Indonesia, Malaysia, the Philippines, and other countries. Whether it's new government policies, industry trends, or investment opportunities, it allows you to grasp key information in real-time, understand the market, and seize business opportunities.
(Central News Agency reporter Pan Chih-yi, Taipei 5th) Research firm TrendForce points out that global optical transceiver module shipments will more than triple from 26.5 million units in 2023 to 92 million units in 2026. Optimistic about the AI optical interconnect business opportunity, it will drive US-based operators to expand outsourced production in Southeast Asia, allowing Taiwanese manufacturers with factories in Southeast Asia to seize orders from non-Red (non-Chinese) supply chains.
TrendForce stated that the huge market opportunities and geopolitical factors are driving the global optical communication supply chain into a period of restructuring, further prompting major US manufacturers to accelerate their outsourcing strategy in Southeast Asia, opening up opportunities for non-traditional optical communication technology companies to enter the field of artificial intelligence (AI) optical communication.
TrendForce explained that in the global optical communication market, Chinese suppliers have long held a dominant position due to their mature, large scale and cost advantages, especially in high-volume general-purpose areas such as Ethernet transceivers and FTTx. The cost competitive advantages of Chinese operators such as Innolight and Eoptolink are even more unshakeable.
In contrast, TrendForce assessed that although US optical communication manufacturers benefit from AI applications and can maintain a certain market share, they are mainly concentrated in high-value-added, high-speed dense wavelength division multiplexing (DWDM) and coherent optics segments, which do not cover the bulk market of all pluggable optical transceiver modules. Therefore, in high-volume standardized products, Chinese manufacturers still hold the dominant position.
TrendForce said that as cloud service providers (CSPs) massively build data centers, the demand for high-speed pluggable optical modules such as 800G and 1.6T is growing rapidly, prompting major US optical communication manufacturers such as Coherent and Lumentum to successively initiate strategic shifts, moving from primarily relying on their own production capacity to a higher degree of reliance on outsourcing models, accelerating capacity expansion and diversifying supply chain risks.
TrendForce pointed out that considering supply chain risk management and the trend of establishing production bases outside of China, major US optical communication manufacturers prioritize technology companies that have already established factories in Southeast Asia when looking for contract manufacturing partners. This shift of production capacity to a "non-China supply chain" benefits Taiwanese technology companies with manufacturing and assembly capabilities in Southeast Asia, successfully undertaking a large number of overflow orders.
From the perspective of technological development, TrendForce explained that since copper interconnects will face signal integrity and power consumption bottlenecks at higher transmission speeds, silicon photonics and co-packaged optics (CPO) architecture have become the medium-to-long-term development direction of optical communication technology, attracting many major technology companies that were not originally focused on the optical communication industry to actively enter the market.
TrendForce believes that this means the future competition focus will shift from simple assembly capabilities to the ability to integrate front-end wafer processes and advanced packaging platforms. Unlike traditional optical communication, which focused on simple module assembly, the emphasis of silicon photonics and CPO is on building an integrated platform around wafer processes and co-packaging technology; "how to make good use of the existing semiconductor industry structure" will become a key threshold for new technology companies to enter the AI optical communication field. (Edited by Chang Chun-mao) 1150505
Choose to stand with facts, every sponsorship you make is a force to protect press freedom.
Download the Central News Agency's "First-hand News" APP to grasp the latest news in real-time.
The text, images, and videos on this website may not be reproduced, publicly broadcast, publicly transmitted, or utilized without authorization.
Central News
Seize the New Southbound Policy, focus on the economic pulse of ASEAN. Central News Agency's "Southeast Asia Financial Information Network" daily selects multiple financial headlines from Thailand, Vietnam, Indonesia, Malaysia, the Philippines, and other countries. Whether it's new government policies, industry trends, or investment opportunities, it allows you to grasp key information in real-time, understand the market, and seize business opportunities.
(Central News Agency reporter Pan Chih-yi, Taipei 5th) Research firm TrendForce points out that global optical transceiver module shipments will more than triple from 26.5 million units in 2023 to 92 million units in 2026. Optimistic about the AI optical interconnect business opportunity, it will drive US-based operators to expand outsourced production in Southeast Asia, allowing Taiwanese manufacturers with factories in Southeast Asia to seize orders from non-Red (non-Chinese) supply chains.
TrendForce stated that the huge market opportunities and geopolitical factors are driving the global optical communication supply chain into a period of restructuring, further prompting major US manufacturers to accelerate their outsourcing strategy in Southeast Asia, opening up opportunities for non-traditional optical communication technology companies to enter the field of artificial intelligence (AI) optical communication.
TrendForce explained that in the global optical communication market, Chinese suppliers have long held a dominant position due to their mature, large scale and cost advantages, especially in high-volume general-purpose areas such as Ethernet transceivers and FTTx. The cost competitive advantages of Chinese operators such as Innolight and Eoptolink are even more unshakeable.
In contrast, TrendForce assessed that although US optical communication manufacturers benefit from AI applications and can maintain a certain market share, they are mainly concentrated in high-value-added, high-speed dense wavelength division multiplexing (DWDM) and coherent optics segments, which do not cover the bulk market of all pluggable optical transceiver modules. Therefore, in high-volume standardized products, Chinese manufacturers still hold the dominant position.
TrendForce said that as cloud service providers (CSPs) massively build data centers, the demand for high-speed pluggable optical modules such as 800G and 1.6T is growing rapidly, prompting major US optical communication manufacturers such as Coherent and Lumentum to successively initiate strategic shifts, moving from primarily relying on their own production capacity to a higher degree of reliance on outsourcing models, accelerating capacity expansion and diversifying supply chain risks.
TrendForce pointed out that considering supply chain risk management and the trend of establishing production bases outside of China, major US optical communication manufacturers prioritize technology companies that have already established factories in Southeast Asia when looking for contract manufacturing partners. This shift of production capacity to a "non-China supply chain" benefits Taiwanese technology companies with manufacturing and assembly capabilities in Southeast Asia, successfully undertaking a large number of overflow orders.
From the perspective of technological development, TrendForce explained that since copper interconnects will face signal integrity and power consumption bottlenecks at higher transmission speeds, silicon photonics and co-packaged optics (CPO) architecture have become the medium-to-long-term development direction of optical communication technology, attracting many major technology companies that were not originally focused on the optical communication industry to actively enter the market.
TrendForce believes that this means the future competition focus will shift from simple assembly capabilities to the ability to integrate front-end wafer processes and advanced packaging platforms. Unlike traditional optical communication, which focused on simple module assembly, the emphasis of silicon photonics and CPO is on building an integrated platform around wafer processes and co-packaging technology; "how to make good use of the existing semiconductor industry structure" will become a key threshold for new technology companies to enter the AI optical communication field. (Edited by Chang Chun-mao) 1150505
Choose to stand with facts, every sponsorship you make is a force to protect press freedom.
Download the Central News Agency's "First-hand News" APP to grasp the latest news in real-time.
The text, images, and videos on this website may not be reproduced, publicly broadcast, publicly transmitted, or utilized without authorization.