LITE: This is no longer a question of whether there are enough orders—it’s that there simply isn’t enough capacity to meet demand. 🔥
Lumentum’s CEO made a very important statement recently:
Optical component capacity is nearly sold out through early 2029. And even with aggressive expansion starting now, it will still be difficult to fully close the supply-demand gap over the next 3–4 years.
What’s even more noteworthy is that the growth drivers keep multiplying:
OCS + 1.6T + CPO/NPO are all entering an acceleration phase at the same time.
1.6T shipments have begun, and adoption is expected to continue increasing;
OCS is evolving from a “supplementary business” into a new growth curve;
High-power lasers for CPO are expected to ramp up in the second half of 2027, in preparation for large-scale deployment in 2028.
Most importantly, some hyperscale cloud providers are even willing to share the capital costs of capacity expansion and secure future capacity through long-term agreements and advance payments.
What does this tell us?
Competition in AI data centers is expanding beyond GPUs to optical interconnects, switches, lasers, and high-speed optical modules.
Compute can be purchased,
but optical communications capacity can’t be built overnight.
The AI infrastructure boom has truly entered the “scramble for capacity” phase.
I remain bullish on $LITE .
In the short term, it’s about share price volatility; in the long term, it’s about just how enormous demand for optical interconnects in AI data centers will become.
$LITE
Lumentum’s CEO made a very important statement recently:
Optical component capacity is nearly sold out through early 2029. And even with aggressive expansion starting now, it will still be difficult to fully close the supply-demand gap over the next 3–4 years.
What’s even more noteworthy is that the growth drivers keep multiplying:
OCS + 1.6T + CPO/NPO are all entering an acceleration phase at the same time.
1.6T shipments have begun, and adoption is expected to continue increasing;
OCS is evolving from a “supplementary business” into a new growth curve;
High-power lasers for CPO are expected to ramp up in the second half of 2027, in preparation for large-scale deployment in 2028.
Most importantly, some hyperscale cloud providers are even willing to share the capital costs of capacity expansion and secure future capacity through long-term agreements and advance payments.
What does this tell us?
Competition in AI data centers is expanding beyond GPUs to optical interconnects, switches, lasers, and high-speed optical modules.
Compute can be purchased,
but optical communications capacity can’t be built overnight.
The AI infrastructure boom has truly entered the “scramble for capacity” phase.
I remain bullish on $LITE .
In the short term, it’s about share price volatility; in the long term, it’s about just how enormous demand for optical interconnects in AI data centers will become.
$LITE