Development traceability: Technology is the foundation, innovation is the driving force

1. Development of optical communication: Technological iteration is accelerating, and domestic substitution is the direction of progress

According to Moore's Law, miniaturization, low cost, and high speed of optical modules are the main directions for product iteration.

2. Competitive landscape: high market concentration, stable position of giants, and steady rise of domestic manufacturers

The optical communication giant has gone through a series of mergers and acquisitions, enhancing vertical collaboration with the entire industry chain, enhancing scale advantages, and improving bargaining power. For example, in May and November 2018, Lumintum and II-VI announced the acquisition of Ocaro and Finisar, respectively. From the perspective of domestic manufacturers, Zhongji Xuchuang and Guangxun Technology have steadily increased their market share; Other manufacturers enhance their competitive advantage through acquisitions, such as Cambridge Technology's acquisition of MacomJapan and OctaroJapan optical module assets in May 2018 and March 2019, respectively; Bochuang Technology acquired some assets related to KaiamPLC business in March 2019.

3. Retrospective thinking: Finisar: Technological breakthroughs are made step by step, and external integration drives a new round of technological innovation

Finisar's Development History:

Phase 1: From 1992 to 2002, driven by technological innovation, various optical modules such as 850NM gigabit multimode fiber optic transceiver modules were launched;

Phase 2: Since 2002, Finisar's technological innovation has mainly been completed through mergers and acquisitions. As of 2014, Finisar has completed 11 acquisitions and mergers successively;

Phase 3: In November 2018, II-VI, a leading passive optical device company, announced for the first time the acquisition of Finisar, which was completed in September 2019.