1、EQUITY:TECHNOLOGYAI networking 2025 outlookGlobal Markets Research4 December 2024Accelerated tech innovation to benefit market leadersAccumulate InnoLight,TFC and HimaxAI networking:fast AI technology innovation leads to buoyant demand;data centers scaling out and upWe believe the intensive AI infra

2、 investment from global hyperscale cloud companies and the shortened technology upgrade cycle will accelerate product innovation in the AI networking segment.Networking equipment and components such as switches,routers,optical cable/transceivers,and copper cables play significant roles in AI data ce

3、nters,and the scaling out of data centers would underpin buoyant demand in the global networking value chain,in our view.Optical transceivers:from traditional pluggable to SiPh to CPO,technology innovation drives industry upgradeDriven by global AI leaders shortened technology upgrade cycles,product

4、 innovation in the optical transceiver market has accelerated,and future technology trends including Silicon Photonics,LPO/LRO,and CPO,which primarily target higher performance,are lowering energy consumption and costs.We believe traditional pluggable optics will still dominate the market over the n

5、ext 1-2 years,with market players participating in the 800G/1.6T product upgrade cycle.Meanwhile,SiPh(pluggable)may experience accelerated penetration,in our view,thanks to cost and power efficiencies.According to LightCounting,the SiPh technology-based optical transceiver market may reach USD8bn in

6、 2026,and its market share may grow from 25%in 2022 to 50%over that time.Over the next 3-5 years,CPO may see rising commercialization opportunities,which could reshape the current competitive landscape.High-speed copper connections:will copper replace optics,or vice versa?Copper connection enables e