As Jensen Huang, Nvidia chief executive officer (CEO), singled out optical communications as a "core technology of the future," related stocks on Korea's market are surging. With some shares soaring more than 600% from the start of the year, the Korea Exchange (KRX) has issued a series of investment caution designations, flashing warnings. Still, because earnings vary widely by company, it is time to sift carefully rather than chase indiscriminately.
On the 14th, Vissem Electronics on KOSDAQ closed at 18,220 won, up 29.96% (4,200 won) from the previous day. WOORIRO also jumped 18.72% from the prior trading day, and Taihan Fiberoptics likewise finished higher. TMC, listed on KOSPI, rose about 10%, while AUK was designated an investment-risk warning the previous day and was suspended from trading for the day.
All are grouped under the optical communications theme and have recently been added one after another to investment caution lists. With Vissem Electronics designated as an investment caution stock for the day, Taihan Fiberoptics, already at the investment warning level, was notified that trading could be halted if there is a further spike. AUK was designated an investment-risk stock, halting trading for the day, and WOORIRO also could not avoid an investment-risk designation.
The rally was sparked as optical communications emerged as a key to artificial intelligence (AI) infrastructure. In particular, at "GTC 2026" last month, Nvidia CEO Jensen Huang identified optical communications as an essential technology for future AI infrastructure, which proved decisive.
Optical communications is a technology that converts electrical signals into light to transmit data. The conventional electrical signal method using copper cables is widely seen as having clear limits in speed and power efficiency to handle the AI era's exploding data volumes.
In this process, optical communications, which sends and receives data at the speed of light through fiber-optic cables, has taken the mound as a reliever. Because AI models must process vast amounts of data in real time, an ultra-high-speed network that organically links thousands of graphics processing units (GPUs) is essential. Compared with copper cables, optical communications consumes less power and is advantageous for long-distance transmission, making it a core infrastructure for expanding AI data centers.
Optical communications stocks have multiplied several times from the start of the year. WOORIRO's share price has surged 826.56% compared with early this year (Jan. 2). Taihan Fiberoptics (619.64%), AUK (657.89%), and Vissem Electronics (238.66%) have also climbed sharply.
The rally in optical communications stocks is continuing not only in Korea but also in the United States. Lumentum (125.63%), Ciena (95.03%), and Coherent (58.46%), cited as leading optical communications names in the U.S., have all soared since the start of the year. In particular, Lumentum and Coherent drew attention after each received $2 billion in investment from Nvidia.
KODEX U.S. AI Optical Communication Network exchange-traded fund (ETF), which mainly includes U.S. optical communications stocks, posted a 34.54% return through the previous day after listing on the 31st of last month.
Kim Cheon-heung, a manager at Samsung Asset Management, said, "The corporations included in the ETF are core infrastructure corporations that supply high-speed optical interconnects and equipment inside data centers that consolidation thousands of GPUs," adding, "As hyperscalers (corporations operating large-scale data centers) accelerate their AI investment cycle, guidance across the optical communications industry is being raised each quarter."
According to Samsung Asset Management, in the case of Lumentum, all of its products are sold out through 2027, while Coherent is responding to strong demand by announcing plans to expand its current production capacity (capa, Capa) fourfold by the end of next year. Ciena has raised guidance, presenting a figure 28% higher than the company's previously expected sales for this year.
Although the importance of optical communications within the AI industry is rising rapidly, the domestic market needs a sober evaluation of individual corporations. In fact, fundamentals differ clearly by corporation. Vissem Electronics has maintained steep growth, with operating profit at 3.7 billion won in 2023, 5.1 billion won in 2024, and 9.1 billion won last year, and earnings per share (EPS) is also solid at about 938 won.
By contrast, Taihan Fiberoptics has been mired in operating losses in the 20 billion won range for three consecutive years from 2023 to 2025. Its operating margin has also worsened from -12.88% to -15.35%. WOORIRO likewise has yet to break a three-year losing streak.
However, some say it is hard to deny these corporations' technical capabilities. Ryu Seong-man, an analyst at Leading Investment & Securities, said of Taihan Fiberoptics, "It is the only vertically integrated company in Korea that simultaneously produces telecom, power, and defense optical cables and their raw material, optical fiber," adding, "In particular, with most sales coming from the United States, the blockage of low-priced Chinese cable entry due to U.S.-China trade tensions is a strong competitive edge."
WOORIRO is also seen as having recognized technical prowess. According to a technical analysis report by the Korea IR Association, WOORIRO is an optical communications and quantum technology specialist founded in 1998 that has built its track record by supplying customized optical communications solutions optimized for a range of industries.