Exponential Laser Chips Demand from Google/ InP / OCS

1. Exponential Laser Demand from Google

Google’s demand guidance for optical chips (CW + EML) is exceptionally aggressive, projected to grow from 200 million units in 2026 to over 1 billion units by 2029.

2. Structural Shortages and the 2027 Critical Gap

The industry anticipates a 10%–20% supply-demand gap in 2027, primarily driven by the 1.6T upgrade cycle. The most significant shortages are expected in 200G EML and high-power CW chips, while the market for 100G EML is predicted to stabilize and reach equilibrium by 2028 as demand for older specifications peaks and begins to decline.

3. PIC Capabilities as a Competitive Differentiator

Technical divergence in 1.6T module design has created a specialized bottleneck for high-power CW lasers. While market leaders like Innolight can utilize 70–80mW sources due to superior Photonic Integrated Circuit (PIC) efficiency, other manufacturers require near-100mW lasers to compensate for higher link loss, making ultra-high-power chips a critical constraint for the broader supply chain.

4. Technical Evolution Toward High-Power CPO Solutions

The transition to 400G per channel is driving the development of next-generation CPO light sources, such as 16-wavelength architectures and 800mW ultra-high-power chips. To support this scaling, the industry is shifting from 4-inch to 6-inch Indium Phosphide (InP) substrates by 2028, with expected chip die sizes increasing by 1.5 to 2 times to handle the intensified power requirements.

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