The division of labor in the global optical module industry chain is clear, and technology in Europe, America, and Japan started earlier, focusing on chip and product research and development. China has obvious advantages in the midstream of the industrial chain: labor costs, market size, and support from telecommunications equipment manufacturers. After years of development, we have become a global optical module manufacturing base and have developed into multiple optical module brands with leading global market share. The division of labor in the industrial chain effectively utilizes global advantageous production factors and avoids duplicate research and development, which is conducive to the efficient operation of the global industrial chain. However, China finds it difficult to share the huge value upstream.
Due to the transparent pricing of low-end products, many overseas companies are unable to accept low gross profit margins, thus divesting their optical module business and focusing on chips or retaining high-end products. On the other hand, optical communication giants have also undergone a series of mergers and acquisitions to enhance vertical coordination of the entire industry chain, enhance scale advantages, and improve bargaining power.
