Jefferies forecasts the optical module market will triple by 2027, despite a persistent 30% shortage in 1.6T modules from 2026 to 2027. The firm anticipates 800G module shipments to reach 40-42 million units in 2026, falling short of the 45 million unit demand, creating a 10% gap. Meanwhile, 1.6T module shipments are expected to be 18 million units against a demand of 26 million units. The market is dominated by US and Japanese companies like Broadcom and Marvell, with Chinese domestic production still developing. Indium Phosphide (InP) is crucial, with 70% of its supply in China, highlighting Yunnan Germanium as a key player. Desay Battery's 200G EML is set for mass production in late 2026, marking a significant step for domestic substitution. Jefferies emphasizes the importance of the InP supply chain and advancements in 200G EML technology for future profit distribution.