Direct:
Nvidia (NVDA) is replacing copper inside its rack-scale AI systems with optical fiber, and the supplier it has bet on is Corning (GLW). The deal announced May 6 takes the form of a $500 million pre-funded warrant, with additional warrants that could bring Nvidia's total investment up to $3.2 billion. Three new plants in North Carolina and Texas, a 10x expansion of Corning's US optical connectivity capacity, and a 50% expansion of US fiber production capacity. The target is co-packaged optics – fiber integrated directly into the switch package, replacing roughly 5,000 copper cables per Vera Rubin NVL72 rack. Spectrum-X Photonics and Quantum-X switches are the first products, with Nvidia citing up to 409.6 Tb/s of throughput in its larger Spectrum-X configurations. So who else benefits?
The numbers being passed around Taiwanese and Hong Kong trade press come from Huatai Securities via SCMP: in 2025, China accounted for 59% of global optical preform output, 57% of fiber, and 47% of cable. The “Big Four” – YOFC (6869.HK / 601869.SS), Hengtong Optic-Electric (600487.SH), FiberHome (600498.SH), and ZTT (600522.SH) – took 60% of China Mobile's most recent fiber tender directly, 77% counting affiliates per CRU. Chinese state media has reported G.657.A2 fiber going from 32 yuan per core-km to 240 yuan, a 650% jump. YOFC, Hengtong, and Tongding Interconnection (002491.SZ) are all up more than 200% year-to-date.
Corning's plant buildout is large in absolute terms – three new facilities, a 10x capacity expansion, a 50% boost to US fiber output. Relative to Chinese supply, it's less impactful. Preform expansion runs an 18-24 month cycle minimum, and Chinese exports continue to expand into a market CRU expects to tighten through 2026-2027. Nvidia secured Corning because Corning is the only US-domiciled vendor at scale, not because Chinese supply is replaceable.
The other constraint nobody can buy their way out of fast is indium phosphide. Per BigGo's reporting on Chinese market analyses, the 1.6T optical module needs roughly 2.7x more InP substrate than an 800G module, and 90% of substrate production sits at Sumitomo (5802.T), AXT (AXTI), and JX Nippon (5020.T via ENEOS), with the supply-demand gap reported at over 70%. Nvidia's March $4B in Coherent (COHR) and Lumentum (LITE) addresses lasers, EMLs, and optical components – the device layer, not the substrate layer. The Corning deal addresses the glass layer; substrate concentration is the hedge nobody has fully closed.
This is an optical-networking story, not a consumer SSD one. Worth tracking anyway because the AI capex wave bidding up HBM and DRAM is now bidding up glass, InP, and lasers in parallel, competing for the same broad Asian electronics capex, materials, packaging, and equipment attention that storage suppliers also need to expand.
Sources:
- DigiTimes, “Nvidia's copper-to-fiber AI shift boosts China's optical plays,” May 12 2026
- SCMP / Wency Chen citing Huatai Securities, May 8 2026
- Nvidia + Corning joint press release and Nvidia Spectrum-X Photonics product page, May 6 2026
- CNBC on warrant structure, May 6 2026
- CRU Group, 2025/2026 China Mobile tender awards, Feb 2025
- CRU Group optical fibre & cable outlook, Dec 2025
- Light Reading on fiber price surge, Feb 2026
- Bastille Post on Chinese fiber price moves
- StorageReview on Vera Rubin / Spectrum-6 CPO, Jan 2026
- Nvidia-Coherent and Nvidia-Lumentum press releases, March 2026
- BigGo Finance on InP substrate pricing and concentration, April 2026
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