The report forecasts 1.6T modules reaching volume production as the next mainstream standard, with 3.2T modules beginning volume ramp-up in 2027. Silicon Photonics is expected to displace EML-based solutions, achieving 60% penetration for 800G, 80% for 1.6T, and 100% for 3.2T products by 2026. Innolight is projected to hold a 50-60% market share for 1.6T modules in 2026, with its capital expenditure increasing 155% year-on-year in 2026 to expand production capacity.
Optical networking is rapidly shifting to higher-speed Silicon Photonics, driving significant capex for leading suppliers like Innolight to meet future AI compute demand.