Earlier this year, $LITE CEO Michael Hurlston reported that Lumentum was under-shipping optical demand by 30%. At the Global Photonics Economic Forum, he revealed that the projected deficit has now expanded to 70%: "Next year, with the advent of CPO and NPO in 2027, our estimate is that we... are going to be under shipping demand by 70% literally 70%. So we can only supply 30% of what we're being asked to supply." He noted that Lumentum is actively having to allocate customer supply, with management not projecting market supply and demand to reach balance until 2029 or 2030. $LITE $COHR $AAOIshow more

Absolutely insane

Right?

This 70% deficit perfectly validates the physical substrate bottleneck.High-power Continuous Wave (CW) lasers for CPO/ELSFP aren't commodity components—outputting >100mW with ultra-low RIN requires 3"/4" Indium Phosphide (InP) substrates and flawless MOCVD epitaxy. Adding reactor capacity takes 18–24 months, while thermal degradation at 80°C+ forces hyperscalers to build in N+1 laser redundancy, accelerating long as Lumentum (LITE)andCoherent(LITE) and Coherent (LITE)andCoherent(COHR) maintain this duopoly on high-power CW sources, their pricing power through 2028 is practically unassailable.

Look at that fucking guy with the toupée and nose I WOULD NOT TRUST THAT MOTHER FUCKER

This 70% deficit perfectly validates the physical substrate bottleneck. High-power Continuous Wave (CW) lasers for CPO/ELSFP aren't commodity components—outputting >100mW with ultra-low RIN requires 3"/4" Indium Phosphide (InP) substrates and flawless MOCVD epitaxy. Adding reactor capacity takes 18–24 months, while thermal degradation at 80°C+ forces hyperscalers to build in N+1 laser redundancy, accelerating consumption. As long as Lumentum ($LITE) and Coherent ($COHR) maintain this duopoly on high-power CW sources, their pricing power through 2028 is practically unassailable.

In June he said it was certainly more than 30. So 70 may just be the first real count.

$LITE under-shipping optical demand by 70% is gonna completely bottleneck the AI buildout, that massive supply deficit is brutal for anyone trying to get components right now. @meghaan_s always understands how these shortages crush the photonics market.