InP Fab Expansion and Supply Chain Bottleneck
Key Questions
What is driving Lumentum's record revenue growth?
Lumentum reported Q3 FY26 revenue of $808M, up 90% year-over-year, with 90% from AI-related products and a $2B NVIDIA stake. The company is raising Q4 guidance due to accelerating AI optical demand and confirmed supply bottlenecks in InP components.
How are companies addressing the InP supply chain bottleneck?
Coherent is expanding its Sherman InP fab with NVIDIA support and $50M CHIPS funding to quadruple wafer output, while AXT sees backlog surge to over $100M with doubled capacity. AAOI is expanding Texas manufacturing by 400k sq ft to reach 700k transceiver units per month by 2027.
What role does silicon photonics play in easing InP constraints?
STMicroelectronics is ramping its PIC100 300mm SiPh platform as a CMOS-compatible alternative to InP for AI optical engines. TrendForce and Reuters reports highlight Lumentum's leading EML position amid China's export controls causing 250% wafer price surges.
Lumentum Q3 FY26 record rev $808M (+90%), 90% AI rev, NVIDIA $2B stake; NC fab 2028; stock +163% YTD, P/S 14x valuation. Lumentum raising Q4 guidance again, confirming AI optical demand cycle accelerating and supply bottleneck. Nvidia $4B EML lockup reinforces InP bottleneck. Nvidia invested another $2B as part of $6.5B photonics blitz, further validating Lumentum's role. AXT InP backlog surge to $100M+ and capacity doubling further confirm substrate tightening. TrendForce confirms Lumentum as leading EML supplier in capacity ramp. Reuters confirms China's InP export controls as a top-tier bottleneck, with 250% wafer price surge, validating supply chain stress. Coherent CEO's China trip and 77% US shipment drop further underscore the InP chokepoint. Coherent CEO publicly raises concerns over InP export delays, noting 77% drop in US shipments and Coherent's 40% market share. Coherent breaks ground on Sherman InP expansion with Nvidia, $50M CHIPS funding, quadrupling wafer output, directly validating the InP supply chain bottleneck and government commitment to domestic photonics manufacturing. AAOI expands Texas manufacturing by 400k sq ft for 800G/1.6T transceivers, targeting 700k units/month by 2027, with 800G revenue ramp from $4.6M in Q1 to projected $217M/month by mid-2027, reinforcing capacity buildout. STMicroelectronics ramps PIC100 300mm SiPh platform as a CMOS-compatible alternative to InP, potentially easing the bottleneck for AI optical engines.