Copper cable high-speed connection concept stocks have exploded. As of today's close, leading cable industry enterprise New Asia Electronics has recorded two consecutive boards in four days, while leading domestic connector manufacturer Derun Electronics has recorded two consecutive boards. Zhaolong Interconnect, which has a high-speed component (DAC copper cable) series product, rose 45% in two days. Its subsidiary, Volvo Nuclear Materials, which produces DAC copper cables, has hit the limit up.
On the news side, Nvidia announced the release of the GB200 superchip at the recent GTC conference. The GB200 NVLink Switch and Spine consist of 72 Blackwell GPUs that are fully connected via NVLink, with 5000 NVLink copper cables (totaling over 2 miles in length). According to NVIDIA's official website, NVIDIA& Reg; Mellanox& Reg; LinkX& Reg; InfiniBand DAC copper cable is the cost-effective way to create high-speed, low latency 100G/EDR, 200G/HDR, and 400G/NDR links in InfiniBand switched networks and NVIDIAGPU accelerated artificial intelligence end-to-end systems.
The communication network is a key factor that restricts the computing power of data centers. AI supercomputing has very strict requirements for network layer data transmission speed and delay, requiring high bandwidth and high-speed switches and communication link matching. In their research report on July 9, 2023, Song Jiaji and others from Guosheng Securities stated that in AI supercomputing and DCI scenarios, the mainstream connection schemes for switching networks are optical modules+optical cables, AOC (active optical cables), and DAC (direct copper cables). DAC can also be divided into active ACC, AEC, and passive DAC.
Optical modules and optical cables are the most mainstream and can be widely and flexibly applied in various scenarios, such as long-distance telecommunications transmission networks, medium distance access networks and DCI, server rack top switches, etc; The I/O ports of the optical module can also be widely adapted to various fiber optic connectors, and the transmission distance is flexible and controllable. AOC integrates optical modules and cables to avoid the possibility of optical port contamination, which is an optimized design solution that balances cost and performance. AOC is specifically designed for interconnection scenarios of ultra short distance Ethernet or InfiniBand switches, typically with a transmission distance of 100 meters.
DAC does not have a photoelectric conversion module, and the two ends of the cable are simple cable connectors, making it the lowest cost high-speed interconnection solution. Due to the physical performance limitations of copper, the transmission distance of DAC is extremely short, and the larger the bandwidth, the shorter the effective transmission distance. In the upgrade of speed from 400G to 800G, the transmission distance will be shortened from 3m to 2m. According to LightCounting, the market size of DAC copper cable connections will exceed 1.2 billion US dollars by 2027, with a compound growth rate of 25% between 2023 and 2027, far exceeding the 14% compound growth rate of the AOC market.
Zhao Liangbi, Galaxy of China, said in a research report on June 30, 2023 that the DAC copper cable solution, with its advantages of low power consumption, low cost and low loss, may form its own high barriers in the construction of computing networks. As China's Internet manufacturers gradually carry out the "copper in and optical out" in their data centers, relevant companies in the industry also deserve attention.
It is reported that for A-share listed companies, Luxon Precision has developed 112G PAM4 passive copper cables and 112G PAM4 active copper cables based on its independently developed Optamax bulk cable technology in copper cable connection; Zhaolong Interconnect's DAC products have been widely used in data centers; Hangjin Technology has completed the research and development of OSFP 800G DAC, with the aim of providing copper cables that meet the requirements of high-speed IB network data transmission; The various connection products independently developed by AVIC Optoelectronics cover NVIDIA's latest copper cable connector products of the same type.
According to incomplete sorting by Caixin News Agency, there are also companies such as Bochuang Technology, Shanghai Beiling, Zhaolong Interconnection, Tianma Intelligent Control, Chujiang New Materials, Walcore Materials, Huamai Technology, and Zhongtian Technology responding to the business layout of Copper Cable (DAC) on the interactive platform. The specific situation is shown in the following figure: