In the technology narrative of the optical module industry, silicon photonics (SiPh) is transforming from an "alternative option" into a "mainstream path." By 2026, the penetration rate of silicon photonics technology in 800G optical modules is expected to reach 50%, and in 1.6T products, it will reach as high as 60%. Behind this trend lie the physical limits and production capacity bottlenecks encountered by traditional technology paths.
Traditional 800G and 1.6T optical modules rely on EML (Electro-absorption Modulated Laser) chips as their core light source. However, EMLs are based on the indium phosphide (InP) material system, and global production capacity for InP substrates is highly concentrated in the hands of a few suppliers, with lengthy capacity expansion cycles. Meanwhile, the explosive growth in demand for 800G and above optical modules in 2026 — global shipments of 800G-and-above optical transceivers are projected to surge from 24 million units in 2025 to nearly 63 million units in 2026, a staggering 2.6-fold increase — is making the supply gap on the EML path increasingly wider. Lumentum disclosed during its earnings call that the supply-demand gap for InP optical chips has already reached 25% to 30%.
Silicon photonics technology opens the breakthrough path for precisely this supply-demand contradiction. Silicon photonic solutions use mature CMOS semiconductor processes to fabricate core optical components such as modulators, detectors, and waveguides on silicon wafers, offering several structural advantages: first, the use of 12-inch wafer manufacturing, where single-wafer output far exceeds that of traditional InP solutions, providing greater scalability; second, natural compatibility with the CMOS foundry ecosystem, enabling large-scale production by leveraging the global semiconductor capacity network; and third, the monolithic integration of multiple photonic functional units, effectively reducing the bill of materials cost and assembly complexity of the module. Silicon photonics empowers photons with mature semiconductor processes, transforming optical communications from a "handicraft" into a "precision industry" and achieving high-precision, high-consistency, and scalable manufacturing.
The industry ecosystem for this technology path is rapidly maturing. The global silicon photonics market is projected to grow from approximately 2.8billionin2025toover31.9 billion by 2035, with a compound annual growth rate exceeding 27%. TSMC is collaborating with NVIDIA to advance mass production of silicon photonic products, Samsung Electronics has announced its silicon photonics technology roadmap and a mass production plan for 2028, and global semiconductor foundry giants are eyeing silicon photonics as their next strategic growth pillar.
Within HaloWill’s product strategy, silicon photonics technology occupies a core position. Both our 800G and 1.6T product lines offer options based on silicon photonic solutions. While maintaining the same performance specifications as EML-based solutions, we provide customers with choices that deliver greater cost competitiveness and supply assurance. We are fully aware that when North American buyers make supplier decisions, they focus not only on the procurement price per module, but more importantly, on supply chain robustness and the sustainability of the technology path. The CMOS-compatible nature of silicon photonics technology means that capacity expansion can leverage the mature global semiconductor foundry infrastructure, offering an advantage in supply chain resilience that traditional InP solutions can hardly match.
As the 1.6T era fully arrives and 3.2T research and development officially commences, the market share of silicon photonic solutions will only expand further. HaloWill will continue to increase its investment in silicon photonics technology, ensuring that we provide North American customers with the most cutting-edge and cost-effective high-speed optical module products.
