BEIJING — With the global push for artificial intelligence (AI) computing power unleashing an unprecedented wave of infrastructure build-out, China-made optical modules that shuttle data and the chips that process it have become critical links.
Featuring the world’s leading market shares and accelerating upgrades, China’s tech supply chains have become essential to sustaining global AI growth.
Chinese firms claim seven spots among the world’s top 10 optical module vendors, with their combined market share exceeding 60 percent globally, according to LightCounting, a research firm.
In the first four months of 2026, China exported 117 billion integrated circuits worth $103.5 billion, up 83.7 percent in value year on year. Export orders for optical modules have stretched into 2028.
Behind these figures lies a deeper shift: China is no longer just participating in the AI supply chain, but offers a supply chain that stabilizes global AI infrastructure.
Optical modules first
If AI is the brain, optical modules are the nerves — converting electrical signals to light and back at blinding speed, shuttling data between servers inside data centers and across continents. A single 1.6-terabit (T) optical module can transmit 95 high-definition movies in one second.
Chinese firms are leading the market. Zhongji InnoLight, based in Yantai in Shandong province, held over 40 percent of the global 800-G optical module market and an estimated 50 to 70 percent of the 1.6-T segment last year, securing first place for four consecutive years. Eoptolink, InnoLight’s cross-province rival in Chengdu, ranked second.
Both companies have secured their positions in the supply chains of companies building the AI clusters that are reshaping the global economy, such as Nvidia, Google and Amazon.
Delivery cycles that once took 12 weeks have been compressed to eight or fewer, as North American clients race to beef up computing capacity measured in weekly increments.
Customs data show that in March 2026, China’s average export price of optical modules rose 23 percent year on year, while fiber and cable exports soared 263.8 percent in value year on year, with the average export price surging 204.3 percent.
Huagong Tech, an optical module manufacturer based in Wuhan, launched the world’s first 12.8-terabit XPO module in March, bundling the capacity of eight 1.6T modules into a single unit tailored for next-generation AI clusters of 100,000-plus graphics processing units.
Ma Xinqiang, the company’s chairman, noted that the North American market for 1.6T modules alone has surpassed $20 billion, while the global market will far exceed $30 billion this year.
The chip rise
The chip story is newer but no less striking. China produced 127.2 billion integrated circuits in the first quarter of 2026, up 24.3 percent year on year and amounting to roughly 14 billion chips a day.
High-value products have become the mainstay of China’s chip exports. In April, export value doubled to $31.1 billion, an increase of 100.1 percent year on year, while export volume edged up merely 3.8 percent. Industry insiders said that such a gap, rarely seen in China’s chip trade, signals a systemic revaluation of export product value rather than simple volume growth.
Among the country’s leading chipmakers, the Semiconductor Manufacturing International Corp. ran at 93.1-percent capacity utilization in the first quarter of 2026, while Hua Hong Semiconductor saw its net profit attributable to parent company shareholders up 458.1 percent year on year to reach $20.9 million, with its capacity utilization rate staying high at 99.7 percent.
Equally significant is what is happening on the equipment side. According to data from the China Semiconductor Industry Association, the domestic semiconductor equipment localization rate climbed from 25 percent at the end of 2024 to 35 percent in 2025.
On new wafer-fab production lines, domestically made equipment accounted for 55 percent of total procurement value by the end of 2025, exceeding the national 50-percent target ahead of schedule, official data revealed.
