VCSEL Shipments Will Reach 650 Million Units by 2031
Driven by AI data center needs, vertical-cavity surface-emitting laser demand will grow at a 38 percent CAGR.
Updated on Oct. 9, 2026 in Semiconductors
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TrendForce forecasts that shipments of vertical-cavity surface-emitting lasers (VCSELs) will climb to 650 million units by 2031. This growth projection covers the period between 2025 and 2031.
Why it matters
The surge in demand is fueled by the evolving requirements of AI data center networks. As these systems expand, they increasingly rely on higher-speed optical interconnects to manage data flow.
Shipments are projected to grow at a compound annual growth rate of 38 percent through 2031. This forecast is based on the industry-wide shift toward integrating VCSEL-based near-packaged optics for short-reach connections.
The players
TrendForce
A global market research firm specializing in tracking semiconductor, display, and green energy technology trends.
The details
VCSELs are semiconductor lasers that emit an optical beam from the top surface of the chip. In modern data centers, developers are utilizing these devices to create near-packaged optics—a design where optical components are placed closer to the processor to reduce signal latency. By enabling high-speed optical interconnects, these lasers facilitate the massive throughput required by AI-driven network architectures.
Timeline
2025 to 2031 marks the projected period of sustained VCSEL shipment growth.
2031 is the target year for reaching the 650 million unit shipment milestone.
The Tech Race
This trajectory follows the industry trend of replacing traditional copper-based interconnects with optical solutions in high-performance computing. It places VCSEL technology at the center of the competition to resolve bottleneck issues in AI data center throughput.
The adoption of these lasers will primarily affect data center infrastructure and high-performance computing workflows. While individual users will not purchase these components directly, this scaling is a technical prerequisite for the increased capacity and speed of future AI services.
The takeaway
The rapid expansion of AI infrastructure necessitates a massive increase in optical interconnect efficiency. Watch the 2025-2031 shipment data to see if actual deployment rates align with the projected 38 percent compound annual growth rate.
Further reading
For more context on the components powering modern compute, visit our Semiconductors section.
Source note: This article includes information reported by Telecompaper.
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