In 2021, China’s 5G large-scale deployment will continue to accelerate its development, gaining a leading edge in the world. According to the latest data from the Ministry of Industry and Information Technology, more than 847,000 5G base stations have been built; the number of 5G mobile phone terminal users has reached 335 million. As we all know, the launch of the new infrastructure strategy has brought new opportunities for the rapid development of information and communication networks such as 5G, and is an important strategic deployment made by my country in the new historical period. Optical communication is an important infrastructure and necessary prerequisite for the development of new infrastructure such as 5G. It has risen to become a strategic public infrastructure, and its level of development has become an important indicator of the country’s comprehensive national strength.

Optical devices are located in the upstream of the optical communication industry. They realize the functions of transmitting, receiving, and processing optical signals through core optoelectronic components. They are the core of the optical communication system. As an important part of the construction of optical communication, optical devices have attracted much attention. From the perspective of the international market share of China’s optical device products released by the Network Telecommunications Information Research Institute, Accelink, InnoLight, Hisense, and Oona have a certain share, but the four companies account for 21.94% of the global share. The United States is a far cry.

The status quo of my country’s optical device industry is not clear, and there are many problems.

• First, there are many optical communication device manufacturers in our country, most of which are small and medium-sized enterprises. The independent R&D and investment strength is relatively weak, and the products are relatively single. They mainly produce low-end products, mainly packaging business, with uneven scale and general income. The total amount is not large.
• Second, the main advantages of domestic optical component companies are their strong cost control capabilities, relatively low labor costs, and undertaking some specific optical component customers’ OEM processing operations. Therefore, in the field of low-end products in recent years, the import substitution effect has gradually appeared.
• Third, it is the chip that affects the cost of the product, and the chip accounts for 66% of the cost, of which the optical chip accounts for 51% of the cost, which is the largest part of the cost. Chips occupy the commanding heights of technology and value, and the country is still weak.
• Fourth, optical/electric conversion accounts for 80% of the cost, and China’s high-end optical/electric chips basically rely on imports.
• Fifth, a few Chinese manufacturers have developed 400G or even 800G optical chips and completed system tests.
• Sixth, global sales of optical components have reached more than 10 billion U.S. dollars.  Sales in the Chinese market have grown rapidly, with sales accounting for around 30-40%.

Mao Qian, honorary director of the Optical Communication Professional Committee of the Chinese Institute of Communications, also pointed out that the optical communication device industry faces many challenges. The production concentration of optical communication devices is not high. Foreign oligarchs are rich and powerful, occupy first-mover advantages, control the high-end of the industry chain, and squeeze the market space of domestic manufacturers.

Optical fiber and cable companies and equipment manufacturers are expanding to the device side, making the original weak device manufacturers besieged and unsustainable. The domestic R&D and production supporting equipment manufacturing capacity is low, and the construction of the process line is heavily dependent on foreign countries. Materials, instruments, software, etc. are also maintained by imports, making it difficult to break through our country’s optical component manufacturers lack the advantages of intellectual property rights, original and basic patents and products, and most of their products follow the pace of foreign countries and lack competitiveness.  In addition, China does not have a particularly strong first-class core enterprise, and high-end products require particularly high technology and craftsmanship. Universities are lacking in cultivating high-end craft talents, and the talents cultivated by enterprises are very easy to lose.

It can be seen that the development of optical devices has become a bottleneck in the development of optical communications. Therefore, promoting the industrial development of optical devices is an indispensable pillar for the development of the optical communications industry.

A few days ago, various optical component manufacturers have spoken out and acted resolutely to “gnaw” this “hard bone”. Yu Shaohua, chairman of Accelink Technology, said frankly that macro-environmental uncertainty is a development problem facing the entire optical device industry. The only way to speed up core key technology research, speed up the introduction and industrialization of high-end optoelectronic devices, and do a solid job of current work, is to respond to external uncertainties and gradually improve its own operating profitability. Feipu Technology, a subsidiary of YOFC, will build a project with an annual output of 10 million high-end optical devices and optical modules this year.

In advancing the development of China’s optical device industry, Mao Qian also put forward five suggestions:

The first one is to improve the industrial layout, carry out industrial restructuring, concentrate talents, technology and financial advantages, expand the scale and strength of the industry, and cultivate China’s optical device flagship enterprises;

The second is to increase investment in optical device scientific research, encourage innovation, make the industry develop towards high-end and core products, and improve corporate competitiveness;

The third is to increase government support, and adopt corresponding measures to favor enterprises in the aspects of optical device industry policy, environment, taxation, talents, import and export, and promote industrial development;

The fourth is to achieve a game of chess across the country, organize cooperation on shortcomings in the optical device industry chain, so that materials, precision processing, process equipment, design software, test instruments and other links can get rid of foreign control and extrusion;

And the last one is to increase the training/introduction of basic theory, technology, and craft talents.

For a long time, the optical device industry has been extremely competitive. With the advancement of 5G, data center and other services in the future, the optical device industry will usher in a new wave of opportunities. I hope that the entire industry chain will work together, innovate, break through the technological fortress, and strive to achieve technological upgrading and evolution, so that China’s optical devices can bloom on the top of the world.