2026-02-25 04:08Summary of Conference Call Notes Industry Overview - Industry: Co-packaged optics (CPO) supply chain and optical components market - Key Players: Nvidia, TFC, T&S, Eoptolink, Lumentum, Corning Core Insights and Arguments 1. CPO Deployment Timeline: CPO is expected to start being deployed in scale-up networks by late 2027, with significant demand anticipated in the second half of 2027 [2][11][14] 2. Market Size Projections: - Total demand for CPO switches is projected to reach 209,000 units by 2027, up from previous estimates of 100,000 units [2][31] - Market sizes for key components in 2027 are forecasted as follows: - FAU/connectors: US$2.2 billion (Rmb15.7 billion) [3][31] - ELSFP modules: US$7.7 billion (Rmb55.4 billion) [3][31] - Fiber shuffle: US$5.6 billion (Rmb40.5 billion) [3][31] - Fiber tray: US$3.3 billion (Rmb24.0 billion) [3][31] 3. Demand Adjustments: The demand forecast for scale-out networks has been revised down from 100,000 to 40,000 units for 2027, while scale-up demand is expected to drive overall growth [2][12] 4. Optical Transceiver Demand: The forecast for optical transceivers demand in 2027 has been raised from 103 million to 115 million units, indicating stronger than expected market conditions [4][34] 5. Stock Recommendations: - TFC and T&S are identified as key beneficiaries in the upcoming CPO era, with Eoptolink also presenting an attractive risk-reward opportunity [5][39] - TFC is expected to be a major supplier for FAU/connectors and ELSFP modules, benefiting from early CPO deployment [53] Additional Important Insights 1. Technological Advancements: The upcoming Nvidia Rubin Ultra NVL576 rack, expected to launch in late 2027, will utilize CPO technology to enhance bandwidth and reduce latency [16][17] 2. Market Dynamics: The report highlights a potential oversubscription rate in the NVL576 architecture, indicating a robust demand for optical components [27] 3. Supplier Landscape: Key suppliers for the CPO supply chain include Lumentum, TFC, and Corning, with a focus on the integration of optical engines and switch ASICs [25][28] 4. Earnings Estimates: Earnings estimates for TFC and Eoptolink have been significantly raised, reflecting the anticipated demand surge in optical components [55][44] This summary encapsulates the critical insights from the conference call, focusing on the CPO supply chain's growth trajectory, market dynamics, and key players poised to benefit from upcoming technological advancements.