Semi Doped Optical Supply Chain: What would you buy?
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Feb 27, 2026 They trace the AI optical supply chain from substrates to finished modules. Key debates cover indium phosphide bottlenecks and export risks. Silicon photonics foundry strategies and wafer-size competition get heavy focus. Laser suppliers, vertical integration plays, and precision optical assembly dynamics are discussed. Fiber demand for AI data centers and timing uncertainties close out the conversation.
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Indium Phosphide Substrates Are A Strategic Bottleneck
- Indium phosphide substrates are a critical bottleneck for optical networking and lasers used in AI data centers.
- AXT controls ~60% share but manufactures in Beijing, creating a geopolitical export-control risk that can directly disrupt supply and revenue.
Avoid Geopolitically Exposed Microcaps At Peak Valuations
- Avoid buying small, geopolitically exposed suppliers at peak prices even if their technology is essential.
- Vikram Shekhar warns AXT's stock ran >1,000% and has near-zero EPS, making it too risky for risk-averse investors now.
Tower Is The Dominant Silicon Photonics Foundry
- Tower Semiconductor is the leading silicon photonics foundry with strong process lock-in and massive demand.
- Tower is expanding silicon photonics capacity 5x with ~70% prebooked via customer prepayments, reducing build risk and confirming demand.