VCSEL Shipments Will Reach 650 Million by 2031
The market for these lasers will grow at an annual rate of 38 percent through the end of the decade.
Updated on Oct. 9, 2026 in Semiconductors
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TrendForce projects that global demand for vertical-cavity surface-emitting lasers (VCSELs) will reach 650 million units by 2031. This growth reflects a significant expansion in the high-speed optical component market between 2025 and 2031.
Why it matters
The surge in demand is primarily driven by the expanding requirements of AI data center networks. These facilities increasingly rely on VCSEL-based technology to support higher-speed optical interconnects for their infrastructure.
The projected shipment volume of 650 million units is supported by a compound annual growth rate of 38 percent. Development currently emphasizes VCSEL-based near-packaged optics to facilitate efficient short-reach connections.
The players
TrendForce
TrendForce is a global market intelligence provider that tracks semiconductor and technology industry trends.
The details
Developers are increasingly integrating VCSEL technology into near-packaged optics systems to optimize data transmission across short-reach connections. This technical shift is essential for meeting the massive bandwidth and speed demands currently placed on modern AI data centers.
Timeline
The growth cycle for VCSEL shipments is projected for 2025 to 2031.
The target year for reaching 650 million units is 2031.
The Tech Race
The transition to VCSEL-based near-packaged optics marks a pivotal shift in how data centers handle short-reach connections. This evolution replaces older interconnect architectures that cannot match the high-speed requirements of current AI-driven network demands.
For users and developers, this shift implies faster and more efficient data processing speeds in AI-supported applications. As these components become standard, the infrastructure powering digital services will become more capable of handling high-volume traffic.
The takeaway
The sustained growth of VCSEL technology highlights the critical role of optical components in the future of artificial intelligence. Businesses investing in data infrastructure should prepare for a landscape increasingly dependent on high-speed near-packaged optical connections.
Further reading
For more on emerging hardware trends, explore the latest updates in Semiconductors.
Source note: This article includes information reported by Telecompaper.
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