OCS optical circuit switching becomes the new engine for AI computing power! Communication ETF GF (159507) once surged over 4% during the session.
On April 3, the last trading day before the holiday, A-share sentiment adjusted, but the optical communication industry chain and the OCS all-optical switching sector bucked the trend and surged.
As of the midday close, the GF Communication ETF (159507) rose 3.31%, with a turnover rate of 7.56% and a half-day turnover of 14.0271 million yuan. Among its constituents, the OCS sector led the gains — DGL reached the 20CM daily limit up. As of midday, DGL rose 18.92%, Guangku Technology rose 10.96%, Tongyu Communication hit the daily limit up, and Guangxun Technology rose 8.32%. Among the top ten weighted stocks, New E-sun rose over 3%, Zhongji Xuchuang, Tianfu Communication, and Zhongtian Technology rose over 5%, Hengtong Optic-electric rose over 8%, and Xinwei Communication rose over 2%.
On the policy front, national-level policies have clearly identified "all-opticalization" as the direction for computing power network construction. On April 2, the General Office of the Ministry of Industry and Information Technology issued a notice requiring the promotion of application deployment for technologies such as all-optical switching, aiming to achieve a one-way network latency of less than 10 milliseconds from computing power application terminals to servers by 2027.
OCS (Optical Circuit Switching) is a crucial part of accelerating computing power through "all-opticalization." It is a switching technology that directly switches optical signals between fiber optic ports within the optical domain, eliminating the need for "optical-electrical-optical" conversion. In traditional electrical switching architectures, a complete link requires four optical modules throughout, repeatedly undergoing electrical-optical-electrical conversion within the switch, generating tens of microseconds of cumulative latency and kilowatts of power consumption. In the OCS architecture, the switch directly reconstructs the optical path at the optical layer, reducing the usage of optical modules per path by 50%. After Google's TPUv4 cluster introduced OCS, the system's overall energy consumption decreased by 40%, and end-to-end latency was compressed from tens of microseconds to tens of nanoseconds.
However, OCS (Optical Circuit Switching) does not completely replace optical modules; instead, it works in a layered, coordinated manner with them. The electrical signals output by servers and GPUs must be converted via optical modules. OCS replaces the electrical switches and numerous pluggable optical modules in the data center Spine/backbone layer.
According to Hua'an Securities' estimates, the global OCS market size will increase from $70 million in 2020 to $780 million in 2025, with a five-year compound annual growth rate (CAGR) of 62%. Northeast Securities, citing Cignal AI data, projects the OCS market size will exceed $1.6 billion by 2029, with a four-year CAGR of about 41%. At the OFC2026 conference, leading companies such as Lumentum, Coherent, and Cisco estimated that the number of OCS switches will have a CAGR exceeding 150% from 2025 to 2028.
The GF Communication ETF (159507) tracks the Guozheng Communication Index, comprehensively covering the optical communication industry map. It selects leading stocks from major segments: optical devices/modules (midstream) → OCS switches (midstream) → fiber optic cables (transmission layer) → communication equipment/operators (downstream). Its top ten weighted stocks include the leading optical module companies "Yi Zhong Tian," fiber optic leaders represented by Hengtong Optic-electric and Zhongtian Technology, satellite communication leader represented by Xinwei Communication, and the well-known three major operators: China Mobile, China Unicom, and China Telecom.
Currently, key A-share OCS companies like Guangku Technology, DGL, Guangxun Technology, and Zhongji Xuchuang are all constituents of the GF Communication ETF (159507).
As of the previous trading day, the GF Communication ETF (159507) gained 22.41% over the past six months and 102.42% over the past year, demonstrating outstanding past performance. The fund's average daily turnover over the past month was 14.2204 million yuan, indicating relatively ample liquidity.
From a valuation perspective, the Guozheng Communication Index tracked by the GF Communication ETF (159507) is at a historical low. Its latest price-to-earnings ratio (PE-TTM) is only 28.33 times, at the 26.88th percentile since the index's inception, meaning its valuation is lower than it was 73.12% of the time since inception.
One-click allocation to GF Communication ETF (159507), off-exchange connect (A:019236, C:019237)
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