Goldman Sachs analyst Allen Chang has released a comprehensive analysis of the Chinese optical networking sector, revealing that the bank's traders are taking no view on potential US policy outcomes. According to reports from Investing.com India, Goldman remains confident about the competitive position of established Chinese optical networking leaders, including FOCI, RoboTechnik, Landmark, Eoptolink and VPEC. The analysis comes as recent reports suggest the Trump administration is considering restrictions on US imports of Chinese-made data center components, with the FCC reportedly working on measures that could extend to Chinese optical modules.
The analysis highlights the extraordinary complexity of AI infrastructure development, with optical modules moving through successive generations of 1.6T, 2.4T and 3.2T technology while simultaneously evolving across multiple form factors including pluggable optics, LPO, NPO and CPO. As reported by Investing.com India, Goldman argues that this complexity places a premium on established suppliers with deep R&D capability and long histories of working directly with cloud service providers. The bank notes that rapid technological migration does not necessarily make the industry easier to disrupt, but can make customers more reliant on suppliers already embedded in the ecosystem.
Goldman's research reveals that seven of the world's top ten optical module suppliers by revenue are based in China, with these suppliers expanding market share in 2025 compared with 2024. According to the analysis, the competitive advantage extends beyond design capability to include scale in capacity commitments, automated production and manufacturing efficiency. The bank notes that as optical specifications move toward 1.6T and above, manufacturing challenges become increasingly unforgiving, requiring more fibers and lasers to be packed into the same box while maintaining thermal management and manufacturing precision.
Goldman expects major optical transceiver suppliers to continue expanding manufacturing capacity in Thailand and other parts of Southeast Asia as they diversify production away from concentrated geographic exposure. As reported by Investing.com India, the diversification push began with US-China geopolitical tensions around 2019, pandemic disruptions from 2020-2022, and another round of tariff increases in 2025. Eoptolink provides a clear example, expanding the second phase of its Thailand capacity during 2026 while its first phase operates at full utilization. This strategy allows technology, engineering relationships and customer integration to remain anchored with incumbent suppliers while physical production becomes increasingly distributed across Southeast Asia.
