Investment Rating - The report maintains an "Outperform" rating for the industry [2] Core Viewpoints - Optical Circuit Switch (OCS) technology enables direct switching of optical signals between fiber ports without optical-electrical-optical (O/E/O) conversion, significantly reducing latency and power consumption, with potential power savings of over 30% for AI computing clusters and data center interconnects [3][4][92] - The OCS market is expected to grow rapidly, with a projected market size exceeding $2.5 billion by 2029, driven by increasing demand from AI data centers and enhanced customer penetration [4][81] - The report highlights four main technology routes for OCS: MEMS, liquid crystal, piezoelectric, and silicon waveguide, with MEMS technology currently leading the market [4][14][92] Summary by Sections 1. OCS as a New Photonic Interconnect Technology - OCS technology allows for high bandwidth capabilities and low latency, making it suitable for modern data center demands [13] - The technology is transparent to rate and protocol, allowing for seamless upgrades without hardware replacement [13] - OCS can be incrementally deployed and expanded, reducing initial capital investment [13] 2. OCS Applications for AI Data Centers - Google has been at the forefront of developing ASIC chips, with the latest TPU generation utilizing OCS technology for enhanced interconnectivity [51][64] - The TPU architecture requires a significant number of ports, indicating a growing demand for OCS solutions [71] 3. OCS Industry Chain Company Layout - Various companies are positioned within the OCS industry chain, including Silex, Tengjing Technology, and Zhongji Xuchuang, each focusing on different aspects of OCS technology and components [83][84] - The report emphasizes the importance of collaboration between domestic manufacturers and leading global firms to capitalize on the OCS market growth [84] 4. Investment Recommendations - The report suggests focusing on companies within the OCS supply chain, particularly those with established partnerships with leading international firms, as they are likely to benefit from the industry's growth [4][90]

Investment Rating - The report maintains an "Outperform" rating for the industry [2] Core Viewpoints - Optical Circuit Switch (OCS) technology enables direct switching of optical signals between fiber ports without optical-electrical-optical (O/E/O) conversion, significantly reducing latency and power consumption, with potential power savings of over 30% for AI computing clusters and data center interconnect systems [3][4][92] - The OCS market is expected to grow rapidly, with a projected market size exceeding $2.5 billion by 2029, driven by increasing demand for AI data centers and enhanced customer penetration [4][79] - OCS technology has four main technical routes: MEMS, liquid crystal, piezoelectric, and silicon waveguide, with MEMS being the fastest to commercialize, primarily led by Google [4][14][92] Summary by Sections 1. OCS as a New Photonic Interconnect Technology - OCS technology avoids traditional bandwidth bottlenecks and power losses associated with electrical switching, offering high bandwidth capacity and low latency [3][13] - The four main technical routes for OCS are MEMS, liquid crystal, piezoelectric, and silicon waveguide, each with different cost, performance, and technical difficulty trade-offs [14][92] 2. OCS Applications for AI Data Centers - Google has been at the forefront of developing ASIC chips, with the TPU reaching its seventh generation, indicating a strong push towards integrating OCS technology in data centers [51][64] - The TPU architecture utilizes OCS technology to interconnect thousands of TPU chips, enhancing performance and efficiency [64][71] 3. OCS Industry Chain Company Layout - Various companies are positioned within the OCS industry chain, including Silex, Tengjing Technology, and Zhongji Xuchuang, each focusing on different aspects of OCS technology and components [83][84] - Companies like Lumentum and Coherent are key suppliers for MEMS and liquid crystal OCS solutions, indicating a robust supply chain for OCS technology [4][14][84] 4. Investment Recommendations - The report suggests focusing on companies within the OCS supply chain, particularly those with deep collaborations with leading global firms, such as Zhongji Xuchuang and Guangxun Technology, as they are expected to benefit from the growth in OCS technology [4][90]