Frost & Sullivan
Nazhen Technology Co., Ltd. (Stock Code: 9856.HK) successfully listed on the main board of the Hong Kong stock market on September 22, 2026. The company is a mature provider of optical communication and optical connection products. It is also one of the few enterprises worldwide that possesses both research and development, as well as production capabilities for optical modules and optical chips. Nazhen Technology is committed to the research, manufacturing, and sales of optical modules, optical chips, and optical network terminals, providing services to domestic and international customers. Frost & Sullivan provided exclusive industry consulting services for Nazhen Technology's listing on the Hong Kong stock market, and we extend our warm congratulations on its successful listing.
Nazhen Technology successfully listed on September 22, 2026. The company plans to offer 172,014,700 H shares, including 154,813,200 shares for international offerings and 17,201,500 shares for public offering sales. The issue price per share is 32.96 Hong Kong dollars, raising a net amount of approximately 5.67 billion Hong Kong dollars.
During the process of listing on the Hong Kong stock market, Frost & Sullivan carried out the following tasks: helping the issuer accurately and objectively understand its position in the target market; using objective market data to identify, support, and highlight the issuer's competitive advantages; assisting the issuer, investment banks, and other intermediaries in completing relevant sections of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, etc.); helping the issuer communicate with the Stock Exchange and investors, enabling investors to quickly understand the market ecosystem and competition landscape; and assisting the issuer in responding to various questions from the Stock Exchange regarding the industry.
Frost & Sullivan has always been a leader in helping companies list on the Hong Kong stock market. According to LiveReport's big data (statistical data as of June 30, 2026), in the past 36 months and 12 months, as well as the statistical period from January to March 2026, Frost & Sullivan provided listing industry consulting services for 195 Hong Kong IPOs (market share: 71%), 101 IPOs (market share: 73%), and 30 IPOs (market share: 77%) respectively, ranking first in terms of number of services provided. Frost & Sullivan has rich industry experience and communication skills with regulatory authorities, exchanges, investment and financing institutions, and related organizations.
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Investment Highlights
- The company is a mature provider of optical communication and optical connection products, able to fully capture the huge growth opportunities of the AI era.
- The company offers a variety of products covering the optical communication industry chain.
- The company drives innovation through a cross-regional R&D network and strengthens its market position in the optical communication industry with its own core technologies.
- The company has established long-term and stable relationships with global customers.
- The company relies on a multi-regional intelligent manufacturing system to ensure large-scale delivery capabilities.
- The company has an experienced management team that leads forward-looking layout and technology development.
According to Frost & Sullivan's report:
- Based on global optical module revenue in 2025, the company ranked fifth among all professional optical module manufacturers globally, with a market share of 4.0%.
- Based on Chinese optical module revenue in 2025, the company ranked third among all professional optical module manufacturers globally, with a market share of 10.1%.
- Based on global optical network terminal box sales revenue in 2025, the company ranked sixth among all professional optical network terminal box manufacturers globally, with a market share of 2.6%.
- Based on Chinese optical network terminal box sales revenue in 2025, the company ranked second among all professional optical network terminal box manufacturers globally, with a market share of 5.4%.
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Global Overview of Optical Communication Industry
Optical communication is a method that uses light waves as carrier signals to transmit information, primarily relying on optical fibers as the transmission medium to enable communication between users. Optical communication has become the dominant mode of global information transmission, supporting modern digital infrastructure and facilitating high-speed, large-capacity data exchange in various industries. Worldwide, the optical communication industry is experiencing accelerated growth due to increasing demand for high-speed connections and digital infrastructure. With the continuous development of AI and cloud computing, the demand for high-speed, low-latency, and highly reliable network infrastructure continues to rise. By 2030, global AI infrastructure investment is expected to increase further to 65,265 billion yuan, with a compound annual growth rate of 22.2% from 2025 to 2030. This trend will drive continuous improvement of optical communication technology and strengthen its role as a core support in the next-generation digital infrastructure and global intelligent connectivity.
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Global Overview of Core Optical Communication Products Industry
The core products of the optical communication industry include optical chips, optical modules, and optical network terminals. These three products form a coordinated and closely linked value chain system, jointly supporting the realization of high-performance optical connections. Among them, optical modules play a core role, enabling high-speed, high-reliability, and low-latency data transmission in increasingly complex data and telecommunications networks. In 2025, the global optical module market size accounted for nearly 30% of the total sales revenue of the optical communication core product industry (optical chips, optical modules, and optical network terminals), and it is expected to grow to approximately 50% by 2030. The performance of optical modules essentially depends on optical chips, which perform core optoelectronic functions such as signal generation, modulation, and detection. Optical modules can be integrated into optical network terminal boxes, serving as both network edge access points and key gateways for edge computing. Optical network terminals are used to connect end-users to high-speed bandwidth networks and also play a key role in edge computing in various application scenarios. These three core products are closely connected, forming the basis of modern optical communication systems.
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Market Size of Core Optical Communication Products Industry
The global optical module industry market size (in sales revenue) increased from 77.6 billion yuan in 2021 to 1,624 billion yuan in 2025, with a compound annual growth rate of 20.3%. Customer demand for products may vary due to various factors. For example, during the COVID-19 pandemic in previous years, many cloud service providers, telecommunications, and network equipment suppliers, and operators stocked up with inventory to prevent potential supply chain disruptions. In 2023, the optical module market declined due to a nationwide inventory reduction cycle. Due to this factor, although the global data communication optical module market sales revenue increased between 2022 and 2023, sales volume declined in 2023. Additionally, the global telecommunications optical module market sales revenue also decreased between 2022 and 2023. Despite these challenges, optical modules remain a key driver of digital and intelligent transformation, laying the foundation for long-term growth. With the rapid iteration and continuous development of optical communication technology, it is expected that by 2030, the global optical module market size will reach 7,076 billion yuan, with a compound annual growth rate of 34.2% starting from 2025.
At the same time, the market size of China's optical module industry (in sales revenue) increased from 181 billion yuan in 2021 to 429 billion yuan in 2025, with a compound annual growth rate of 24.0%. Looking ahead, it is expected that by 2030, the market size will reach 2,008 billion yuan, with a compound annual growth rate of 36.1% starting from 2025. In 2025, China's share in the global optical module market reached 26.4%, and it is expected to rise to 28.4% by 2030.
In 2025, driven by the rapid expansion of data centers and advancements in artificial intelligence technology, the data communication optical module market size reached approximately 1,155 billion yuan. This segment is expected to grow significantly, reaching 6,336 billion yuan by 2030, with a compound annual growth rate of 40.5% starting from 2025. Meanwhile, in 2025, the telecommunications optical module market size reached approximately 469 billion yuan. Although the market declined slightly in 2023 due to normalization of demand after the pandemic, it is expected to recover with the deployment of 6G networks and the development of next-generation optical communication technologies such as 25G/50G PON. By 2030, the telecommunications segment market size is expected to reach 739 billion yuan, with a compound annual growth rate of 9.5% starting from 2025.
After mass production of new optical module products, their market share often grows rapidly due to growing demand, while the share of existing products decreases accordingly. Worldwide, 400G and higher speed optical modules are becoming the mainstream. Driven by the rapid expansion of data centers and cloud computing, high-speed optical modules, especially 800G and higher transmission speed optical modules, are experiencing rapid growth. The compound annual growth rate of 800G optical module sales revenue from 2021 to 2025 was 156.3%, and it is expected that the compound annual growth rate from 2025 to 2030 will reach 13.9%. At the same time, 1.6T optical modules, as next-generation technologies, are expected to grow rapidly. From 2025 to 2030, the sales revenue of 1.6T optical modules is expected to grow at a compound annual growth rate of 98.9%. As ultra-large-scale infrastructure continues to expand, 1.6T optical modules are expected to become the mainstream, and 3.2T technology is also beginning to emerge.
The global optical chip industry market size (in sales revenue) increased from 135 billion yuan in 2021 to 328 billion yuan in 2025, with a compound annual growth rate of 24.8%. This growth is due to the exponential growth of global data traffic, accelerated digital transformation in various industries, and widespread application of AI, 5G, and cloud computing. As emerging technologies continue to break through in terms of speed, integration, and energy efficiency, optical chips are expected to continue to be a key driver of next-generation optical communication. It is expected that the global optical chip market (in sales revenue) will maintain strong growth, reaching 2,336 billion yuan by 2030, with a compound annual growth rate of 48.1% starting from 2025. China's optical chip market (in sales revenue) increased from 31 billion yuan in 2021 to 79 billion yuan in 2025, with a compound annual growth rate of 25.8%. Looking ahead, it is expected that the market will reach 643 billion yuan by 2030, with a compound annual growth rate of 52.2% starting from 2025.
Driven by the rapid global deployment of FTTX networks and increasing demand for high-speed and stable connections, the global market size of the optical network terminal box segment (in sales revenue) increased from 286 billion yuan in 2021 to 467 billion yuan in 2025, with a compound annual growth rate of 13.0%. In 2021, the demand for the optical network terminal box market was relatively low, mainly due to supply chain disruptions and cautious investments by telecommunications operators during the COVID-19 pandemic. After the recovery of infrastructure construction after the pandemic, government stimulus measures, and accelerated fiber optic network deployment, the market reached a significant peak in 2022. As demand returned to normal, the market declined slightly in 2023. Looking ahead, it is expected that the global optical network terminal box market will maintain an upward trend, reaching 810 billion yuan by 2030, with a compound annual growth rate of 11.7% starting from 2025. This continued growth is due to the global shift to gigabit and terabit broadband, as well as the continuous expansion of Smart Homes and IoT applications. China's optical network terminal box market (in sales revenue) increased from 117 billion yuan in 2021 to 187 billion yuan in 2025, with a compound annual growth rate of 12.6%. Looking ahead, it is expected that the market will reach 305 billion yuan by 2030, with a compound annual growth rate of 10.3% starting from 2025.
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Market Drivers and Development Trends of Optical Communication Industry
Policy-driven FTTX and AI infrastructure construction
Governments around the world are actively promoting the development of broadband and AI infrastructure through strategic policies, thereby increasing demand for optical communication products. Large-scale deployment of FTTX networks in different countries and regions is promoting the adoption of optical network terminal boxes, enabling high-speed access in residential and commercial environments. For example, China is actively promoting the "Gigabit Optical Network" initiative and the "East Data, West Computing" project, aiming to achieve gigabit access capabilities by 2025. In the United States, the "Infrastructure Investment and Employment Act" passed in 2021 allocated 1.2 trillion dollars for various infrastructure projects, including 65 billion dollars specifically for improving broadband access and quality. Meanwhile, the construction of AI-related infrastructure (including data centers and cloud computing platforms) worldwide has created strong demand for high-performance optical modules. For example, the Starlink plan announced in January 2025 plans to invest 5,000 billion dollars in building new AI infrastructure in the United States over the next four years. The Chinese government is strongly supporting the rapid development of optical communication and AI technologies through a series of policies, such as the "National Data Infrastructure Construction Guidelines" and the "National Artificial Intelligence Industry Comprehensive Standardization System Construction Guide (2024 Edition)". These policies encourage expanding fiber optic network construction and supporting the construction of data centers and cloud computing infrastructure.
Application of AI Technologies
The rapid development of AIGC and other AI technologies is significantly driving the AI industry, leading to a surge in demand for high-performance computing platforms. To meet the massive data processing requirements brought about by large-scale data transmission, real-time computing, and AI training, optical modules, as core components of data transmission, play an important role due to their high bandwidth, low latency, and long-distance transmission capabilities. Therefore, optical modules will become a key component in driving the development of AI technologies.
Development of Advanced PON Technologies
With the acceleration of global digital transformation and the development of emerging technologies, advanced PON technologies meet the urgent market demand for higher bandwidth and lower latency. At the same time, with the accelerated application of emerging technologies such as AI and IoT, the industry's demand for higher bandwidth and stronger data processing capabilities has increased significantly, leading to the emergence of 25G/50G PON technologies. Additionally, evolving PON technologies will also promote the upgrade of optical network terminal hardware through improved transmission speed and network capacity. The development of emerging technologies will also continue to drive optical communication products toward more integrated and intelligent directions.
Application of 5G and Emerging 6G Technologies
The deployment of 5G and research on 6G are accelerating the upgrade of wireless communication networks, driving increasing demand for higher-speed, larger-capacity, and higher reliability data transmission. Optical modules play a key role in ensuring low-latency, high-bandwidth link connections between different network units. In the future, as 6G gradually enters commercialization, driven by more complex applications such as immersive communication and smart sensing, the demand for advanced optical modules will continue to grow, driving continuous innovation in the entire optical communication industry.
Continual Growth in Demand for High-Speed Optical Modules
Global data center construction is entering a rapid growth phase, and the surge in data traffic is driving demand for higher bandwidth and lower latency communication capabilities. High-speed optical modules (such as 400G, 800G, and 1.6T optical modules) have become key components for device interconnection within and between data centers. They not only support large-scale parallel computing and AI training/inferencing high-performance tasks but also ensure efficient data flow between cloud, edge, and terminal areas. At the same time, the iteration speed of optical module technology is accelerating. The technological leap from 100G to 400G, and then to 800G, was achieved in just a few years, and 1.6T optical modules are entering the stage of large-scale commercialization. With the continuous growth of AI computing, high-performance networks, and cloud infrastructure demands, the optical module industry is developing rapidly to support higher-speed and lower-power connections. Although 400G and 800G optical modules have entered the stage of large-scale commercialization, the transition to 1.6T optical modules is being actively promoted. The research and development of 1.6T optical modules began in 2020-2021, and current technologies are in a rapid development stage. These products will start being widely used in the first half of 2026. Looking ahead, 3.2T optical modules will become a key development direction, but related technologies are still in the early research stage, and the commercialization may delay until after 2028. Given the long development, testing, and certification cycles, companies such as Nazhen Technology that participate in the research and development of next-generation optical modules early can seize the future growth opportunities brought by the continuous expansion of AI infrastructure. Each generation's product launch cycle is shortening, indicating a rapid update phase in the market. Leading manufacturers are leveraging their technical advantages to accelerate the research and development of next-generation products, meeting the growing demands of data centers and AI clusters, and driving innovation and implementation of emerging technologies in the entire industry.
Evolution of Optical Module Frontier Technologies
Driven by strong downstream demand, companies in the optical module industry are actively promoting the research and development of emerging technologies. For example, silicon-optical module technology is an advanced solution based on silicon, utilizing mature CMOS processes to develop and integrate optical components and optical modules. Optical modules incorporating silicon photon components are increasingly used in high-density, high-speed, highly integrated applications such as data centers, and are expected to become a key solution to meet growing demands for bandwidth and energy efficiency. Meanwhile, innovative packaging technologies such as NPO, CPO, Linear Receiving Optics (LRO), and Linear Drive Plug-in Optical Devices (LPO) further enhance the performance and energy efficiency of optical modules. LRO is a semi-linear approach that significantly reduces power consumption, while retaining only DSP at the transmitting end to maintain the flexibility and scalability of DSP optical module models. LPO, by eliminating the need for DSP, significantly lowers power consumption and has become a key trend in future optical communication. NPO and CPO shorten the transmission path between them, thereby improving signal integrity and reducing energy consumption. As these emerging technologies mature, they are expected to reshape the industry's competitive landscape. Companies that lead in deploying cutting-edge optical module technologies will gain significant first-mover advantages and strengthen their position in a highly competitive market.
Frost & Sullivan's vertical integration capabilities continue to strengthen.
In recent years, leading Chinese optical module manufacturers have actively enhanced their vertical integration capabilities, establishing a full-industry-chain development system that covers optical modules, optical chips, and optical network terminals. By expanding into the upstream sector, these companies have begun developing and mass-producing core optical components, achieving significant breakthroughs in areas such as EML chips. The 100G/200G EML chips per channel have become the fundamental building blocks for higher-speed aggregation in 800G and 1.6T optical modules, making them the mainstream of high-speed optical technology. Global shipments of 100G/200G EML chips began around 2024. The next-generation 400G EML chips are currently available in limited quantities, and it is expected that mass production will start around 2027, providing support for deploying 3.2T optical modules in AI and high-performance network applications. Through proactive planning for next-generation EML technology, companies such as Nazhen Technology already possess a first-mover advantage, enabling them to capture emerging market demands. The longer R&D cycle gives these companies a strategic advantage, allowing them to smoothly transition existing products while gaining customers ahead of competitors. At the same time, these manufacturers are expanding into downstream areas such as optical network terminals (like optical network terminal boxes), covering the entire optical network value chain from data centers to transmission networks, access networks, and terminal applications. By strengthening industry chain integration, these companies not only improve product compatibility but also enhance their response speed to market demand changes, accelerating product iteration and increasing customer loyalty. This in turn enhances their overall competitiveness in a rapidly evolving technological environment.
