Optical Communication Industry News Brief (June 21 - July 21, 2025)

1. Policies & Standards: Strategic Impetus Drives Industrial Upgrades

China’s Ministry of Industry and Information Technology released the 14th Five-Year Plan for Optical Communication Industry Development on June 15, setting a target of 95% fiber-to-the-home coverage by 2025 and incorporating 6G optical communication R&D into key tasks. The policy emphasizes the "All-Optical Network 2.0" initiative, mandating a full upgrade of backbone networks to 400G/800G standards while promoting the industrial application of disruptive technologies such as hollow-core fibers and silicon photonics. This is expected to drive China’s optical communication market scale to exceed 800 billion yuan, directly benefiting manufacturers of optical fibers, cables, modules, and components. Internationally, AT&T announced plans to accelerate fiber network deployment, aiming to cover 1 million new locations annually starting in 2026, in response to policy support under the U.S. One Big Beautiful Bill Act .

2. Technological Breakthroughs: 1.6T Optical Modules Near Mass Production; Hollow-Core Fibers Accelerate Commercialization

1.6T optical modules reach commercialization threshold

Huawei announced on June 20 the successful development of a 1.6T optical module based on silicon photonics technology. Using third-generation integration processes, it reduces volume by 70% and power consumption by 40%, with mass production scheduled for the end of 2025. Leading enterprises like Zhongji Innolight and Eoptolink have also reported progress: Zhongji Innolight’s 1.6T modules have passed NVIDIA’s GB200 platform certification, with small-batch shipments commencing in Q2; Eoptolink’s 800G LPO (Linear Direct Drive) modules have secured orders from Meta and Amazon, while its 1.6T products are undergoing sampling tests. According to LightCounting, global optical module market revenue grew 25% year-on-year in Q2 2025, with 800G modules accounting for over 60% and 1.6T modules contributing more than 5% for the first time.

Hollow-core fibers enter the era of large-scale application

Hengtong Optic’s anti-resonant hollow-core fibers, showcased at the 3rd Chain Expo, attracted industry attention. With a transmission loss as low as 0.2dB/km—reaching international advanced levels—the fibers have entered small-batch delivery. China Telecom and China Mobile recently launched hollow-core fiber procurement, with unit prices dropping from 48,000 yuan per core-kilometer in the first tender to 37,000 yuan, a decrease of over 25%. Designed with a gas core, these new fibers increase channel capacity by 5x and reduce latency by 30%, and have been piloted in scenarios such as financial high-frequency trading and distributed smart computing centers. The industry predicts the global hollow-core fiber market will reach $105 million by 2030, with a compound annual growth rate of 7.5%.

3. Key Projects: 800G Backbone Networks and Submarine Cables Advance in Tandem

China’s first 800G backbone network fully launches

China Mobile, in collaboration with Huawei, launched the country’s first 800G backbone network on June 25, covering 10 core cities including Beijing, Shanghai, and Guangzhou. With a single-fiber transmission capacity of 48T—48 times that of traditional 100G networks—it uses Changfei’s G.654E ultra-low-loss fibers and Huawei’s tunable ultra-high-speed modules, combined with Raman amplification technology to achieve 1,100-kilometer transmission without repeaters. Scheduled for completion in 2026, it will support computing power scheduling for the "East Data West Computing" project.

International submarine cable competition intensifies

Google, Meta, and NTT’s joint "Equiano 2" submarine cable system has officially launched. Stretching 15,000 kilometers and connecting Asia and Europe, it is set to enter service in 2027 with 3x the capacity of its predecessor. Meanwhile, Japan’s NEC was selected to build the "Asia United Gateway East" (AUG East), which uses 400G PAM4 technology to directly link Southeast Asian and North American data centers, addressing bandwidth pressures from surging AI computing demand.

4. Market Trends & Industry Directions: AI Drives Demand Surge; CPO Technology Emerges

AI computing demand reshapes supply chain dynamics

Leading optical module manufacturers reported strong H1 performance: Zhongji Innolight projects net profit of 3.6-4.4 billion yuan, a year-on-year increase of 52%-87%; Eoptolink’s net profit surged 3x year-on-year, with 800G module shipments accounting for over 50%. Market research shows Alibaba Cloud plans to adopt 800G modules in 2025 and deploy 1.6T modules in 2026, while NVIDIA’s B100 series servers will drive significant 1.6T demand growth in Q4. McKinsey warns that optical module supply chain bottlenecks could become a key barrier to AI infrastructure expansion, advising early deployment of next-generation technologies such as silicon photonics and CPO.

CPO technology enters validation phase

At the 10th China Fiber Connect Forum (CFCF2025), Cambridge Technology and Source Photonics showcased 3.2T optical engine prototypes based on CPO (Co-Packaged Optics). With 40% lower power consumption than traditional solutions, they have completed testing with NVIDIA’s Quantum-X platform. The industry predicts the CPO market will grow from $120 million in 2025 to $1.2 billion in 2035, becoming the mainstream solution for data center optical interconnection.

5. Global Developments: Photonic Quantum Computing Becomes New Battleground

Netherlands-based QuiX Quantum secured €15 million in Series A funding to deliver the world’s first general-purpose photon-based quantum computer by 2026, with core technologies seamlessly integrable with optical communication networks. Chinese enterprises are advancing in parallel: Lemon Photonics completed a new round of financing, focusing on high-end semiconductor laser chip R&D; Sugon and China Star Map signed an agreement to advance optical interconnection technology for space computing. These developments signal optical communication’s expansion from traditional communication to emerging fields such as quantum computing and space information.

Conclusion

Over the past month, driven by policies, technological breakthroughs, and market demand, the optical communication industry has advanced with a focus on "higher speed, lower power consumption, and ubiquity." Milestones such as 1.6T module mass production, hollow-core fiber commercialization, and CPO technology validation have strengthened China’s global leadership in the industrial chain while laying the groundwork for future technologies like 6G and quantum computing. As AI computing demand continues to surge, the industry will see broader growth opportunities—alongside challenges including supply chain bottlenecks and international technological competition.