NTT will launch production of optical communication devices in 2026, partnering with Broadcom and other chipmakers to address surging electricity consumption at AI data centers, Nikkei reported Monday.
The photonics-electronic convergence devices represent NTT’s latest effort to commercialize its decade-old IOWN initiative, which promises to transmit data using light rather than electrical signals. Global data center electricity consumption is projected to reach 945 terawatt-hours by 2030, nearly doubling from current levels, according to International Energy Agency estimates.
NTT Innovative Devices plans initial monthly output of 5,000 units, with aspirations to exceed one million annually as demand scales. The telecom giant claims the technology could slash network power consumption to one percent of today’s levels while boosting transmission capacity 125-fold—ambitious targets that remain unproven at commercial scale.
Whether optical networking can deliver on its efficiency promises matters increasingly to hyperscale operators. Wholesale electricity prices have surged 267 percent over five years in some U.S. markets near data center concentrations, creating financial pressure to adopt power-saving technologies.
NTT faces stiff competition. Intel has sold silicon photonics products for seven years, while TSMC, Samsung and Nvidia are developing rival approaches. Broadcom’s Ram Velaga acknowledged the market is large enough for multiple suppliers, noting customers prefer competitive options for technology adoption and scalability.
