Goldman Sachs Raises High-Speed Optical Module Demand Forecast, Flags Supply Constraints for 2027

News Editor

2026-09-14 12:23:31

Goldman Sachs sharply lifted its demand forecasts for high-speed optical modules after visiting 15 optical communications companies in China, saying demand for 800G and above modules will reach 144 million units in 2027 and 171 million units in 2028, up 39% and 36% from its prior estimates. The bank said demand is being driven by AI server rack expansion, a shift in network architecture from scale-out to scale-up with broader inter-layer interconnection, and the continued move toward higher transmission speeds. Goldman also expects 1.6T optical module pricing to stay above $700, while 800G products may see only a single-digit price decline by 2027. At the same time, it said the industry bottleneck is moving from demand to supply, with shortages in DSPs, lasers and PCBs likely to cap actual shipments in 2027. The firm added that leading manufacturers are locking in capacity through prepayments, long-term supply agreements and investments in suppliers, a trend that could reinforce industry concentration and support pricing. In CPO, Goldman expects switch shipments to rise from 10,000 units in 2026 to 92,000 in 2027 and 131,000 in 2028.

Goldman Sachs has sharply raised its forecast for high-speed optical module demand after visiting 15 optical communications companies in China, according to a Sept. 14 update cited by BlockBeats. The bank now projects demand for 800G and above optical modules to reach 144 million units in 2027 and 171 million units in 2028, marking upward revisions of 39% and 36%.

Goldman also said it expects 1.6T optical module prices to remain above $700. For 800G products, the bank sees only a single-digit price decline by 2027.

Demand drivers center on AI infrastructure

The bank attributed the stronger outlook to several factors: expansion of AI server racks, a network architecture shift from scale-out to scale-up alongside broader inter-layer interconnection, and the continued upgrade of optical modules toward higher speeds.

Companies interviewed by Goldman expect overall demand in China to post double-digit growth, with total market size exceeding 50 million units. Demand is still concentrated in 800G and 400G products, while 1.6T remains at an early volume ramp stage.

Supply-side pressure may limit shipments

Goldman said the main industry constraint is shifting from the demand side to the supply side. Shortages of key components including DSPs, lasers and PCBs could directly limit actual shipments in 2027.

Leading manufacturers are responding by locking in capacity through prepayments, long-term supply agreements and investments in suppliers. Goldman said that trend could strengthen industry concentration and help support pricing for high-speed optical modules.

CPO switch shipment forecast climbs

In co-packaged optics, or CPO, Goldman expects switch shipments to rise from 10,000 units in 2026 to 92,000 units in 2027 and 131,000 units in 2028. The bank added that testing and coupling equipment makers may be among the earliest beneficiaries.

Among related companies, Luobo Tek reported second-quarter revenue growth of 172% quarter over quarter, above Goldman’s 141% forecast. Visibility on related equipment orders has extended to 2028.

This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan.

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