On February 27th, it was reported recently that the market research institution LightCounting wrote in its latest report that the huge investment hyperscalars in artificial intelligence infrastructure in 2025 has almost tripled the shipment of 800G PAM4 chipset, and the sales have doubled-on-year.

This investment momentum continued to strengthen in 2026. In this regard, LightCounting has raised its forecast for the shipment of 80G and 1.6T optical modules. It is expected that the shipment of 800G optical modules in 2026 will more than double, the shipment of 1.6T optical modules will increase from a small base in 2025 to tens of millions of ports. The sales of 1.6 chipset will exceed $2 billion in 2026 and maintain rapid growth before 2029.

Historically, Ethernet and DWDM chipset have accounted the majority of the market share. However, in 2025, the data center market has driven the rapid growth of sales of chipset used in active optical cable (OC/AEC/ACC) and board-mounted retimers. During this forecast period, retimed Ethernet optical modules will still contribute the largest sales increment, followed by optical cable and linear optical solutions (LPO/LRO/CPO).

Despite the surge in PAM4 chip sales in 2025, coherent DSP chipset sales grew only moderately by16%, mainly driven by the demand for DWDM modules. With the large-scale deployment of 1.6T PAM4 optical modules in AI infrastructure, the in sales between PAM4 and coherent chipset will further widen in 2026.

LightCounting expects the growth rate of PAM4 chipset sales slow down during 2027-2031, as the large-scale deployment of linear driving solutions such as LPO and CPO will have a negative impact the sales of DSP chips. By 2027, it is expected that shipments of “Coherent-Lite” products will significantly boost the sales of coherent DSP.

Overall, LightCounting projects coherent DSP chip shipments to exceed 8 million by 2031. In addition, if AI training is widely spread across multiple within a data center campus, it could push up the forecast, as such applications require higher inter-building connectivity bandwidth.

LightCounting noted that the historical data for chipset was derived from the sales data of optical modules and active optical cables, and the future predictions are also based on this method. This method enables a clear correlation between chipset demand and deployment of optical interconnects in various application scenarios. However, this method does not fully reflect the difference in demand between chipset and optical module, which may stem from changes in levels at different links in the supply chain.