According to TechNews, TrendForce notes that the rise of AI applications has greatly increased the need for high-speed optical communications. The industry is now centered on three expansion models for AI server and data center architectures—Scale Up, Scale Out, and Scale Across. Among these, the optical communication module market driven by Scale Out is emerging as the main battleground for future data transmission, TrendForce adds.
[Market News] NVIDIA’s 2025 photonic switch revolution: powering the AI future
In 2025, NVIDIA will launch photonic switches with co-packaged optics (CPO), a bold move driven by technological necessity and surging market demand. This innovation, set to debut with the Quantum-X InfiniBand switches in late 2025 and Spectrum-X Ethernet switches in 2026, targets the explosive growth of AI-driven data centers.
AI data centers and high-performance computing expected to drive huge increase in demand over the coming decade.
The market for photonic integrated circuits (PICs) is predicted to grow by close to an order of magnitude over the next ten years, and reach an annual total of $54 billion by 2035.
[Market News] DeepSeek's Low-Cost AI Model to Spur Demand for Optical Communication
While DeepSeek has successfully reduced AI training costs, the broader cost reduction of AI models is expected to expand application scenarios and drive an increase in global data center deployments. Optical transceivers, as a key component in data center interconnectivity, are set to benefit from the growing demand for high-speed data transmission. AI servers rely heavily on optical transceivers to convert electrical signals into optical signals, transmit them via optical fiber, and then convert received optical signals back into electrical signals.
