OCS stands for all-optical switch, a switching device that directly enables the switching of optical signals between fiber ports without the need for optoelectronic conversion, offering numerous performance gains.

Analysis indicates that the core advantage of optical interconnects lies in overcoming the physical limitations of copper connections in terms of bandwidth, distance, and power consumption. CPO and OCS will gradually transition from optional choices to essential components for large-scale AI fabrics. As one of the mainstreams in optical communication, OCS expansion is expected to reach an inflection point this year.

Dissection of Value Distribution Across OCS Optical Switch Industry Chain Segments

Upstream Core Components (Core Value Zone)

MEMS Chips (Core of MEMS Solution)

Fiber Array Units (FAU, Key to Precision Coupling)

Optical Components (Collimating Lenses/Filters/Prisms, etc.)

Wavelength Division Multiplexers & Circulators

Midstream Support and Integration (Value Transmission Zone)

Custom Optical Modules: Priced higher than standard modules

Complete Machine Integration and OEM: Assembly and testing costs account for approximately 15% of the total machine cost

Control and Software Modules: Responsible for optical path scheduling and self-healing, accounting for about 15% of the cost

Downstream Applications and Complete Machines (Value Realization Zone)

Value of Core Application Scenarios

AI Computing Clusters (Google TPU Networking) as the Current Largest Demand

Data Center Spine Layer Replacement and DCI Interconnect as the Second Growth Curve

Growth Capabilities of Enterprises in the OCS Optical Switch Industry Chain

Enterprise growth capability refers to the ability of an enterprise to continuously increase its asset size, profitability, and market share in response to changes in the market environment, reflecting its future development prospects.

This article, part of the Enterprise Value Series' [Growth Capability] section, selects 15 enterprises in the OCS optical switch industry chain as research samples and uses compound growth in revenue, net profit excluding extraordinary items, and operating net cash flow as evaluation metrics.

Data is based on history and does not represent future trends; it is for static analysis only and does not constitute investment advice.

10th: Weiteng Electric

Industry Segment: Cable Components and Others

Growth Capability: Compound revenue growth of 22.23%, compound net profit excluding extraordinary items growth of -21.76%, compound operating net cash flow growth of 153.15%

Earnings Forecast: Latest mean net profit forecast of 0.31 billion yuan, with a mean forecast growth rate of -67.58%

Main Products: Busbars as the primary profit source, accounting for 47.51% of profits, with a gross margin of 25.28%

Company Highlights: Weiteng Electric has deeply entered the silicon photonics OCS technology and product field through its holding joint venture Weipu Xinguang.

9th: Hengwei Technology

Industry Segment: Other Computer Equipment

Growth Capability: Compound revenue growth of 44.83%, compound net profit excluding extraordinary items growth of -66.13%, compound operating net cash flow growth of -96.46%

Earnings Forecast: Latest mean net profit forecast of 0.42 billion yuan, with a mean forecast growth rate of 54.57%

Main Products: Network visualization as the primary profit source, accounting for 68.04% of profits, with a gross margin of 64.36%

Company Highlights: Hengwei Technology is one of the few companies that have achieved R&D, release, and commercial validation of complete OCS optical switches, with OCS being its core business in AI computing power networking.

8th: LUSTER LightTech

Industry Segment: Other Automation Equipment

Growth Capability: Compound revenue growth of -15.42%, compound net profit excluding extraordinary items growth of -45.98%, compound operating net cash flow growth of -30.00%

Earnings Forecast: Latest mean net profit forecast of 1.71 billion yuan, with a mean forecast growth rate of 59.72%

Main Products: Machine vision products as the primary profit source, accounting for 74.53% of profits, with a gross margin of 36.40%

Company Highlights: LUSTER LightTech represents leading international high-end optoelectronic components and instrumentation, providing 800G/1.6T optical modules, OCS all-optical switching, fully automatic photonic wire bonding equipment, and other products and solutions for AI computing power upgrades.

7th: FFTC

Industry Segment: Optical Components

Growth Capability: Compound revenue growth of 12.04%, compound net profit excluding extraordinary items growth of 11.24%, compound operating net cash flow growth of 0.35%

Earnings Forecast: Latest mean net profit forecast of 2.86 billion yuan, with a mean forecast growth rate of 30.87%

Main Products: Nonlinear optical crystal components as the primary profit source, accounting for 38.34% of profits, with a gross margin of 76.94%

Company Highlights: FFTC is a major supplier of core upstream materials and key components for OCS (optical switches), particularly deeply involved in the OCS supply chain of leading cloud providers like Google.

6th: Waytop Technology

Industry Segment: Optical Components

Growth Capability: Compound revenue growth of 30.96%, compound net profit excluding extraordinary items growth of 82.20%, compound operating net cash flow growth of 4.04%

Earnings Forecast: Latest mean net profit forecast of 0.83 billion yuan, with a mean forecast growth rate of 19.41%

Main Products: Precision optical components as the primary profit source, accounting for 80.80% of profits, with a gross margin of 38.07%

Company Highlights: Waytop Technology is a core upstream supplier of optical components for the OCS (optical circuit switch) industry chain, primarily providing key precision optical components to complete machine manufacturers.

5th: Accelink

Industry Segment: Communication Network Equipment and Devices

Growth Capability: Compound revenue growth of 36.49%, compound net profit excluding extraordinary items growth of 11.56%, compound operating net cash flow growth is negative

Earnings Forecast: Latest mean net profit forecast of 10.40 billion yuan, with a mean forecast growth rate of 57.29%

Main Products: Data and access as the primary profit source, accounting for 48.95% of profits, with a gross margin of 17.83%

Company Highlights: Accelink is the only domestic leading manufacturer to achieve mass production of MEMS-OCS (optical circuit switches) and is a core player and technology leader in the OCS industry chain.

4th: T&S Communications

Industry Segment: Communication Network Equipment and Devices

Growth Capability: Compound revenue growth of 12.26%, compound net profit excluding extraordinary items growth of 12.61%, compound operating net cash flow growth of -17.23%

Earnings Forecast: Latest mean net profit forecast of 6.51 billion yuan, with a mean forecast growth rate of 117.74%

Main Products: Optical component products as the primary profit source, accounting for 98.75% of profits, with a gross margin of 38.31%

Company Highlights: T&S Communications is a core upstream supplier of passive components for OCS optical switches, providing high-density fiber connections and array components, and is a key link in Google's OCS supply chain.

3rd: TDK-Lambda

Industry Segment: Communication Network Equipment and Devices

Growth Capability: Compound revenue growth of 10.99%, compound net profit excluding extraordinary items growth of -47.33%, compound operating net cash flow growth of -75.40%

Earnings Forecast: Latest mean net profit forecast of 2.39 billion yuan, with a mean forecast growth rate of 234%

Main Products: Transmission products as the primary profit source, accounting for 71.98% of profits, with a gross margin of 29.03%

Company Highlights: TDK-Lambda is one of the few domestic enterprises with R&D capabilities for complete OCS (optical circuit switch) machines and core components, focusing on the silicon waveguide route and being a key supplier for optical interconnects in AI computing clusters.

2nd: Zhonji Xuchuang

Industry Segment: Communication Network Equipment and Devices

Growth Capability: Compound revenue growth of 60.25%, compound net profit excluding extraordinary items growth of 111.31%, compound operating net cash flow growth of 244.31%

Earnings Forecast: Latest mean net profit forecast of 219.84 billion yuan, with a mean forecast growth rate of 103.61%

Main Products: Optical communication transceiver modules as the primary profit source, accounting for 99.28% of profits, with a gross margin of 42.61%

Company Highlights: Zhonji Xuchuang is Google OCS's dual-core supplier of 'optical modules + OEM' and also independently develops MEMS-OCS and silicon photonics OCS, deeply binding with the next-generation architecture of AI computing power networks.

1st: Fiberlake Technologies

Industry Segment: Communication Network Equipment and Devices

Growth Capability: Compound revenue growth of 47.56%, compound net profit excluding extraordinary items growth of 190.11%, compound operating net cash flow growth of 23.59%

Earnings Forecast: Latest mean net profit forecast of 2.81 billion yuan, with a mean forecast growth rate of 59.08%

Main Products: Optical communication devices as the primary profit source, accounting for 51.51% of profits, with a gross margin of 33.48%

Company Highlights: Fiberlake Technologies is a core OEM and key component supplier in Google's OCS (optical circuit switch) supply chain, deeply binding with Google's TPU computing clusters through acquisitions and technological integration.