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TrendForce’s latest research into the Micro LED industry highlights how generative AI is driving rapid growth in demand for high-speed optical communications. Micro LED technology offers power consumption as low as 1–2 pJ/bit and ultra-low bit error rates (BER) of ≤10⁻¹⁰. It’s also emerging as one of the three major short-distance, high-speed intra-rack transmission solutions for scale-up data center networks, alongside active electrical cables (AEC) and VCSEL-based near-packaged optics (VCSEL NPO). As a result, TrendForce projects that the Micro LED CPO optical transceiver market will reach US$848 million by 2030.
The average 8-inch capacity utilization rate among the world’s top 10 foundries is projected to approach 90% in 2026, and remain above 80% through 1H27. Foundries are reallocating 8-inch and 12-inch mature-node capacity toward power-related processes to improve ASP and profitability, benefiting Chinese foundries through order spillover. TSMC’s planned reduction in 12-inch mature-node capacity may further drive order redistribution, creating opportunities for Tier 2 foundries to raise prices.
TrendForce’s latest findings on the AI industry highlight that several major North American CSPs have recently raised their 2026 capital expenditure (CapEx) guidance in response to strong AI demand. As a result, TrendForce has revised its forecast for the combined CapEx of the world’s top nine CSPs—Google, AWS, Meta, Microsoft, Oracle, ByteDance, Tencent, Alibaba, and Baidu—up to approximately US$830 billion in 2026, with the annual growth rate raised from 61% to 79%.
Global shipment volume of optical transceivers is projected to more than triple from 26.5 million units in 2023 to over 92 million units by 2026, according to TrendForce’s latest AI infrastructure research. This massive market opportunity—combined with geopolitical factors—is driving a restructuring of the global optical communications supply chain. It is also accelerating outsourcing strategies among U.S. vendors in Southeast Asia, creating an entry point for non-traditional technology players to move into AI optical communications.
TrendForce’s latest foundry industry findings point out that AI demand has surged rapidly since 2023, leading to capacity bottlenecks in 3 nm–2 nm wafers and 2.5D/3D advanced packaging. The shortage of CoWoS has persisted, extending upstream to production equipment and downstream to substrates, packaging materials, and other critical components.
