Direct:
Re: DigiTimes
Silicon photonics gets the headlines, but indium phosphide is the part of the stack with the tighter substitution problem. Silicon doesn't lase, InP does. That single physics fact is now sitting under many 800G and 1.6T transceivers going into hyperscaler AI clusters, and the supply side hasn't caught up.
TrendForce has 800G+ optical transceiver shipments going from roughly 24M in 2025 to 63M in 2026 (2.6x), with the AI optical transceiver market expanding from $16.5B to $26B. Win Semiconductors (3105.TW), the largest GaAs/InP foundry, guided for a 2-3x increase in 1.6T-related demand in 2026. McKinsey's mid-2025 model had 800G falling 40-60% short of demand through 2027 and 1.6T running 30-40% short through 2029. One supply-chain analyst put 2025 InP wafer shipments at 600-700K against roughly 1.5-2M of demand.
The sharper chokepoint appears to be EML (electro-absorption modulated laser) capacity, while substrates remain part of the constraint. Lumentum (LITE) is the only volume shipper of 200G-per-lane EMLs, the exact part 1.6T pluggables need. Nvidia (NVDA) has been pre-allocating EML capacity past 2027 to lock in its Quantum-X and CPO roadmap. Coherent (COHR), Semtech (SMTC) via the HieFo acquisition, AXT (AXTI) on the substrate side, and Veeco (VECO) on the MOCVD tool side sit on adjacent parts of the same demand curve.
Optical pluggables, CPO, and the InP supply behind them are competing for the same hyperscaler capex pool as storage and DRAM. If you've wondered why enterprise SSD pricing has held more firmly than retail this cycle, the AI BOM has shifted toward photonics components that weren't on the BOM at all two years ago.
*Drafted with AI assistance against parallel reporting*
Sources:
– DigiTimes, “InP compound semiconductors break AI power and bandwidth barriers” (May 2026)
– DigiTimes, “World's largest GaAs foundry sees 2-3x surge from 1.6T optical boom” (Feb 2026)
– TrendForce, AI optical transceiver market forecast (Apr 2026)
– TrendForce, Nvidia EML lock-in / laser shortage note (Dec 2025)
– TrendForce, 6-inch InP photonic fab groundbreaking (Mar 2026)
– McKinsey optics supply analysis (mid-2025, surfaced via tspasemiconductor and photoncap)
– Coherent FY26 Q1 datacenter and comms coverage, Futurum (2026)
– Tom's Hardware, Nvidia CPO/silicon photonics roadmap (2026)
Reddit: https://ift.tt/jBGTKsa