TAIPEI (Taiwan News) — Advanced Micro Devices’ reported push to secure optical communications components for AI data centers could create spillover opportunities for Taiwanese suppliers, according to reports.
The development reflects a broader shift in AI infrastructure. As workloads grow, the main constraint is no longer just computing power, but how quickly data can move between chips, servers, and entire racks inside data centers.
Optical communications use light-based signals rather than electrical signals to transmit data. This allows higher speeds and lower signal loss over long distances, making the technology increasingly important for large-scale AI systems, according to CommonWealth Magazine.
Supply chain sources said AMD is in discussions to secure key optical parts, including high-power continuous-wave laser chips and plug-in optical modules. Continuous-wave laser chips generate a steady laser beam used as a light source, while plug-in optical modules can be inserted into systems to enable high-speed data transmission.
The push is partly driven by tight supply, as advanced optical components struggle to keep up with rapid AI infrastructure expansion.
If AMD increases procurement, analysts expect several Taiwanese suppliers to benefit across different layers of the supply chain. These include printed circuit board makers Compeq Manufacturing and Plotech, which supply PCBs used in high-speed optical modules above 800G, according to CTEE.
The firms are expected to benefit from demand for high-speed networking hardware. Faster optical modules not only increase data transmission speeds but also require more complex PCB designs and tighter engineering tolerances.
Other potential beneficiaries include epi-wafer supplier LandMark Optoelectronics, which is among the few global suppliers capable of mass-producing silicon photonics continuous-wave laser epitaxial wafers. This places the company in the upstream segment of the shift from copper-based wiring to optical interconnects.
Ezconn is also positioned to benefit, as it has exposure to both optical communication passive components and high-frequency radio frequency connectors. Other related firms, including optical module players such as LuxNet and Pcl Technologies, could also see demand increases.
AMD’s reported move comes as competition intensifies across the AI industry to secure optical networking capacity needed for data center expansion. Nvidia has already moved in this direction, investing heavily in optical communications suppliers, including NT$63.6 billion (US$2 billion) each in Coherent and Lumentum, to secure future production capacity for advanced laser and optical components.
As AI data centers scale up, newer architectures that reduce data transmission bottlenecks, such as co-packaged optics, near-packaged optics, and onboard optics, are gaining traction. Supply chain sources also point to tightening demand for key materials, including indium phosphide substrates, continuous-wave lasers, electro-absorption modulated lasers, and photodetectors, all of which are becoming increasingly central to AI networking infrastructure.
