In 2026, the biggest challenge facing the optical module industry is not insufficient demand, but supply failing to keep up. TrendForce clearly points out that core optoelectronic chips represented by EML lasers and CW-LD are in tight supply due to capacity allocation issues, and high-precision process capabilities such as optical alignment are also key factors limiting capacity expansion.
This supply tightness is not a short-term phenomenon. As 800G optical module shipments are expected to exceed 40 million units in 2026 and the first year of commercialization for 1.6T optical modules begins, industry demand for high-end optical chips is growing exponentially. To reduce supply risks, upstream suppliers led by NVIDIA and major system manufacturers have begun introducing strategic long-term agreement mechanisms to lock in key materials and gradually reduce reliance on spot procurement.
Against this backdrop, optical module suppliers with localized North American production capacity are becoming scarce resources. Cambridge Technology plans to use H-share fundraising proceeds to inject $100 million into its U.S. subsidiary to expand high-speed optical module capacity and supporting facilities in North America and Southeast Asia, enhancing global delivery capabilities. The company has clearly stated that in the second half of 2026 it will accelerate construction of its Mexico plant, striving to complete an annualized optical module capacity target of no less than 6 million units within the year, ensuring delivery of orders for core North American customers.
AOI (Applied Optoelectronics) has expanded its manufacturing base in the Houston, Texas area to approximately 900,000 square feet, and is expected to achieve a production capacity of 700,000 800G and 1.6T optical modules per month by the end of 2027. The establishment of such North American local manufacturing capacity can not only effectively avoid supply chain geopolitical risks, but also shorten delivery lead times from weeks to days.
It is worth noting that U.S. tariff policy grants exemption treatment to optical module products. Communications equipment, optical modules, and other products under the semiconductor classification currently fall within the scope of tariff exemptions, providing policy assurance for North American buyers procuring from global suppliers.
