At 200 gigabits per channel, a copper cable runs out of steam before it even reaches one meter — the signal fades and it gets too hot. But the GPUs in an AI cluster sit tens of meters apart, in different racks, different buildings, even different cities. The only way to keep scaling is to turn electrons into light, shoot them through glass fiber, and convert them back on the other side. That converter is the optical transceiver — a tiny part whose market blew past $23 billion in a single year, and is now both a bottleneck and a new treasure trove of the AI era.
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Theme index· base 100 · USD total return
Why is Optical Interconnect & DCI moving?
Latest
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AI optics demand keeps broadening; supply, capital and execution risks persist
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Demand broadens across the optical chain Corning, Coherent, Furukawa, Credo, MaxLinear and Marvell all reported or guided to sharply higher AI-driven optical sales, and Citi says networking — not raw compute — is now the main AI bottleneck. That keeps the long-term demand force behind the theme firmly intact.
Shows the core demand force still accelerating across many suppliers, the main reason to own the theme.
New money and capacity pour into optics Focuslight plans a 1.02 billion yuan raise for optical interconnect, Linktel is putting up to $150 million into a Malaysia 800G/1.6T base, and Furukawa will spend about 100 billion yen on fiber capacity. New capital expands supply, which supports the theme's growth runway.
Capital and capacity additions determine whether the theme can keep growing to meet demand.
Consolidation and new products widen the ecosystem Zhongji Innolight is buying 10.47% of Jones Tech for 1.747 billion yuan, Naruida is acquiring 51% of DCI/OTN maker Xintai, and Arista launched an open Ethernet rack-scale portfolio with 102.4 Tbps switches and next-gen optics. These deepen the theme's product base.
Deals and new products show the theme broadening beyond a few module makers.
Execution slips and customer concentration bite MaxLinear pushed its next-gen Rushmore optical chip to 2027, and Ciena fell 10% on in-line guidance with two customers at 41.7% of revenue. Not every company delivers on schedule, and heavy customer concentration is a real risk even as overall demand grows.
The main counterweight: individual names can stumble even when the theme's demand is strong.
Tower Semiconductor and NewPhotonics Begin High-Volume Shipments of Optical Engine PICs for AI Interconnect
Tower Semiconductor and NewPhotonics announced high-volume shipments of laser-integrated, serviceable optical engine photonic integrated circuits developed for next-generation AI infrastructure interconnect. The products are built on Tower's PH18DA silicon photonics platform, which uses heterogeneously integrated indium phosphide components to place semiconductor optical amplifiers, modulators, lasers, and photodetectors on a single chip, and the companies say the integration reduces complexity and manufacturing variability while improving yield, reliability and time to market. Volume production today covers data rates from 800G to 1.6T, with 6.4T solutions planned for future volume manufacturing to serve both scale-out and scale-up architectures, and shipment of the 6.4T NPC505 chipsets is anticipated during the first half of 2027. NewPhotonics is the first player across the market to scale up production on Tower's PH18DA InP-on-silicon photonics platform, and Tower faces execution risks in scaling alongside it, along with competition from alternative architectures and other silicon photonics foundries. Tower's stock has rallied 99.97% in 2026, lifting its market capitalization to $25.85 billion, with an operating margin of 19.63%, a net margin of 16.94%, a trailing price-to-earnings ratio of 91.11x, a forward P/E of 38.46x and a return on equity of 9.98%.
TSEMI03.BK · Demand · Positive High-volume shipments of Tower's PH18DA silicon photonics optical engine PICs for AI interconnect mark real product adoption.
NewPhotonics · Demand · Positive NewPhotonics is first to scale volume production of its optical engine PICs on Tower's PH18DA platform, with 6.4T NPC505 chipsets shipping in H1 2027.
TSEMI23.BK · Competition · Negative Article flags execution risks in scaling and competition from alternative architectures and other silicon photonics foundries.
TSEMI80.BK · Capital · Neutral Stock rallied 99.97% in 2026 with rich valuation metrics, but no new company-specific financial event.
Openreach Deploys Ciena's 1.6Tb/s Waveserver Platform in OSEA Rollout
Openreach is deploying Ciena's Waveserver platform, powered by WaveLogic 6 1.6Tb/s coherent technology, as part of its Optical Spectrum Extended Access portfolio. The deployment combines 400G and 800G client traffic over dedicated 1.6Tb/s wavelengths, with a compact 2RU chassis supporting up to 32 400G services, and enables Openreach to introduce national 800G services across the U.K. while providing a pathway to higher speeds. The solution will let Openreach offer wholesale customers tailored, high-capacity network services including connectivity for cable landing stations, data centers and core network nodes. Ciena faces competition from Corning, which announced a long-term partnership with NVIDIA to expand U.S.-based optical connectivity manufacturing capacity by 10 times and increase domestic fiber production capacity by more than 50%, and from Nokia, whose Network Infrastructure unit delivered double-digit growth in second-quarter 2026. Ciena shares have gained 27.3% in the past month, and the Zacks Consensus Estimate for its fiscal 2026 earnings has been revised upward over the past 60 days.
CIEN · Demand · Positive Openreach is deploying Ciena's Waveserver/WaveLogic 6 1.6Tb/s platform in its OSEA rollout, a concrete customer win.
GLW · Competition · Neutral Corning is cited only as a Ciena competitor via its NVIDIA optical-connectivity manufacturing partnership, not as a subject of the news.
NOK · Competition · Neutral Nokia is mentioned only as a competitor whose Network Infrastructure unit posted double-digit Q2 2026 growth.
Guangzhi Technology Secures Order from Global Leading Customer for 6-Inch Indium Phosphide Substrates
Guangzhi Technology stated on an investor interaction platform on October 9 that its downstream customers for indium phosphide substrate business are domestic and overseas optical communication chip and device manufacturers, and batch deliveries have been achieved to date. The company said its domestic customers cover leading optical chip enterprises, and it has shipped in volume to leading optical communication firms overseas. Among these, the 6-inch indium phosphide substrate has secured an order from a certain global leading customer.
Tianfu Communication Responds to Rumors of Overseas Import and Export Policy Restrictions: Optical Device Products Not Affected
Tianfu Communication released an investor relations activity record announcement, responding to recent rumors about overseas import and export policy restrictions. The company stated that the policies issued so far do not impose constraints on optical device products and do not affect its business. The company said its main business is the research, development, production, and sales of various passive and active optical devices. Its sales revenue from the U.S. market accounts for a relatively low proportion, with North American sales revenue making up about 1.28% of total operating revenue in 2025. Based on current operations, the company's orders on hand and customer demand remain robust overall, and it will advance global capacity expansion in an orderly manner according to market demand and customer project timelines. The company remains optimistic about the long-term prospects of the optical interconnect industry, especially the continued growth opportunities in areas such as CPO and NPO. In addition, the company's FAU and ELS products supporting CPO already have a solid foundation in performance, yield, and delivery assurance, and these products have achieved stable mass production and delivery.
Artificial Intelligence › AI Networking & Interconnect ▲Regulation
300394.CS · Regulation · Positive Company states overseas import/export policy restrictions do not affect its optical device products, removing a regulatory overhang on its business.
Arista Unveils Open Ethernet Rack-Scale Portfolio for AI Infrastructure
Arista Networks has unveiled a new open Ethernet rack-scale portfolio designed to support high-density artificial intelligence infrastructure across both scale-up and scale-out environments, developed with AMD, Arm, Broadcom, d-Matrix, Meta, Microsoft and Qualcomm. The company's Etherlink SU-14 architecture extends Ethernet into scale-up environments, supporting up to 144 accelerators in a single rack and up to 1,024 XPUs through cross-rack configurations. For scale-out AI environments, the rack-scale solutions support technologies such as ESUN, NVIDIA's NVLink, NVLink Fusion and PCIe, built on Arista's Netdi foundation using Ultra Ethernet Consortium standards. The rack designs integrate liquid-cooled 7060EX7 switches with up to 102.4 Tbps of capacity per switch, and the company's next-generation optics, including XPO and open CPO/NPO, can raise networking capacity from 1.6 Pb/s to 6.5 Pb/s per rack compared with current OSFP-based switches. Arista faces competition from Cisco Systems, which is expanding its AI infrastructure business through its Secure AI Factory with NVIDIA, and from NVIDIA, which is advancing its Vera Rubin platform and developing Spectrum-6 Ethernet.
ANET · Technology · Positive Arista unveiled a new open Ethernet rack-scale portfolio (Etherlink SU-14, 7060EX7 switches, XPO/CPO optics) for high-density AI infrastructure.
Credo Technology Joins Open CPX MSA Co-Packaged Optics Consortium
Credo Technology Group Holding Ltd. has joined the Open Co-packaged Interface Multi-Source Agreement, or Open CPX MSA, a consortium working to advance interoperable near-package and co-packaged optics architectures for AI networking. As a member, Credo will contribute its optical DSPs, silicon photonics-based integrated circuits and other components to support the standard, which released its initial specification on September 17, 2026, defining interoperable co-packaged and near-package optical modules supporting connectivity of up to 7.2 Tbps per socket. The company also recently completed testing of its Toucan Gen6x16 PCI Express retimer, which has been added to the PCI-SIG Integrators List. Credo shares have returned 51.95% year to date, and as of October 7 the stock traded at a trailing price-to-earnings multiple of approximately 77.70x and a forward P/E of 30.19x. By the end of Q2 2026, 86 hedge funds held positions in the stock, up from 59 in Q1 2026, with BlackRock the largest institutional owner at 17.76 million shares, or 9.45% of outstanding shares.
Astera Labs Unveils Aries 7, Industry's First PCIe 7 Signal Conditioning Portfolio
Astera Labs announced Aries 7, which it calls the industry's first PCIe 7 signal conditioning portfolio spanning both copper and optical interconnects. The portfolio includes smart retimers, redrivers, cable modules, optical drivers, and optical transimpedance amplifiers, extending link reach from centimeters of PCB trace to 50+ meters over optical cables across multiple racks. Aries 7 supports the OCP Signal Conditioner Standard Footprint, and its fleet management and diagnostics are unified under the COSMOS software suite. AMD and Intel, which have each validated Aries Smart Retimers in production from PCIe 4 through 6, are collaborating with Astera Labs on the PCIe 7 transition. The products are expected to begin sampling in Q4 2026 to select hyperscale, OEM, and NPO customers, with broader availability anticipated as platforms complete qualification, and Astera Labs will showcase PCIe 7 copper and optical demonstrations at the 2026 Open Compute Project Global Summit, Oct. 12-15 in San Jose.
ALAB · Technology · Positive Astera Labs unveiled Aries 7, the industry's first PCIe 7 signal conditioning portfolio spanning copper and optical interconnects.
AMD · Technology · Positive AMD is collaborating with Astera Labs on the PCIe 7 transition, having validated Aries Smart Retimers in production through PCIe 6.
INTC · Technology · Positive Intel is collaborating with Astera Labs on the PCIe 7 transition, having validated Aries Smart Retimers in production through PCIe 6.
Morgan Stanley Report Triggers Sharp Sell-off in CPO Concept Stocks
On October 8, CPO concept stocks in China's A-share market fell sharply. Yuanjie Technology and Changguang Huaxin hit their 20 percent daily limit down, Shijia Photonics dropped more than 15 percent, Dongshan Precision hit its 10 percent daily limit down, Dekeli fell more than 10 percent, and Changxin Bochuang dropped more than 8 percent. On the news front, Morgan Stanley recently issued a report noting that potential U.S. restrictions on optical modules from China may be implemented through the FCC controlled list mechanism rather than a full embargo. The core of the policy is the 65 percent U.S. content rule, meaning Chinese-made transceivers can still be imported but must meet the condition that 65 percent of the value in the bill of materials comes from U.S. companies. The report stressed that this is a reshaping of the supply chain and a redistribution of profits along the value chain, rather than a simple positive or negative from sanctions. The rule could be implemented as early as the 3.2T optical module stage, with mass production expected in 2028. At that point, Chinese manufacturers would be allowed to continue assembly, but procurement of core components such as DSPs and lasers would be locked in with U.S. suppliers. The report specifically noted that the combination of DSPs and lasers could easily reach the 65 percent threshold. The report believes the short-term impact is limited, because large-scale adoption of 3.2T products is not expected until 2029, and hyperscale cloud service providers have already arranged for U.S. domestic manufacturing. The policy goal is to target the production location of next-generation products, not to immediately replace the existing supply chain.
Artificial Intelligence › AI Networking & Interconnect ▼Regulation
688313.CG · Tariff · Negative Shijia Photons dropped over 15% as the Morgan Stanley report warned of U.S. content-rule restrictions reshaping the optical module supply chain.
002384.CS · Tariff · Negative Dongshan Precision hit its 10% limit down amid the CPO sell-off triggered by potential U.S. restrictions on Chinese optical modules.
300548.CS · Tariff · Negative Broadex Technologies fell more than 10% as part of the CPO concept sell-off driven by the Morgan Stanley report on U.S. optical module restrictions.
688048.CG · Tariff · Negative Named among CPO concept stocks that hit 20% limit down after Morgan Stanley flagged potential U.S. restrictions on Chinese optical modules via the FCC 65% U.S. content rule.
Everbright Photonics Responds to Morgan Stanley Report: 3.2T Ramp-Up Still Far Off, No Short-Term Impact on Domestic Optical Chips
A staff member on Everbright Photonics' investor hotline, responding to an interview with National Business Daily, said the company has taken note of the Morgan Stanley research notes mentioning that potential FCC rules could restrict Chinese optical modules in the 3.2T generation. The staff member pointed out that the Morgan Stanley report is not an official document, and the authenticity and specific impact of the information remain uncertain. Secondly, the projection targets 3.2T optical modules, but the volume ramp-up of 3.2T itself is not expected until 2028 to 2029, with the current market still dominated by 800G and 1.6T. Therefore, there is no substantive impact on the domestic optical chip industry in the short term. Everbright Photonics' share price is 231.76 yuan, with a market capitalization of 40.855 billion yuan.
Artificial Intelligence › AI Networking & Interconnect Regulation
688048.CG · Regulation · Neutral Company says Morgan Stanley's note on potential FCC rules restricting Chinese optical modules in 3.2T is unofficial and uncertain, with no short-term impact on domestic optical chips.
Ciena Shares Jump 14% on Marvell's 60-70% Optical Growth Outlook
Ciena Corp. rebounded as much as 14.3 percent in intraday trading on Tuesday to $445.36 apiece, helped by peer Marvell Technology's growth outlook for the optical interconnects sector. At its recent Investor Day, Marvell said it expects the industry to grow by 60 to 70 percent to about $65 billion through 2030, with switching and storage alone reaching $85 billion, or a compounded annual growth rate of 40 percent. Those figures were markedly higher than Ciena's own 30 percent growth outlook for its business by 2029. Bernstein initiated coverage with an outperform rating and a $440 price target, acknowledging near-term supply constraints but calling the stock undervalued, while Evercore maintained an outperform rating and a $550 price target, citing optimism that Ciena can achieve more than $25 in earnings per share. Hedge fund holders in Ciena rose to 81 in the second quarter from 73 in the first, with combined holdings up 2 percent to $3.997 billion from $3.913 billion quarter-on-quarter.
CIEN · Capital · Positive Ciena shares jumped 14% after Bernstein initiated with an outperform rating and $440 target and Evercore maintained outperform with a $550 target, calling the stock undervalued.
MRVL · Demand · Positive Marvell's Investor Day projected the optical interconnects industry to grow 60-70% to about $65 billion through 2030, signaling strong end-market demand.
Fabric.AI Taps Kearney to Lead Commercialization of Neural I/o Optical Interconnect Platform
Fabric.AI has engaged global management consulting firm Kearney to lead and accelerate the commercialization strategy for its Neural I/o MicroLED-based optical interconnect platform. The company, together with its development partner Kopin Corporation, has executed non-disclosure agreements with several leading semiconductor and data center technology companies, with technical discussions already underway. Kearney's mandate is to convert that early engagement into a structured commercial pipeline by sharpening product positioning, identifying and prioritizing target customers and channel partners, and preparing Fabric.AI for active sales discussions expected to begin after planned hardware demonstrations in early 2027. James Altucher, an independent strategic advisor to Fabric.AI, said Neural I/o addresses the two constraints defining the next generation of AI data centers, how much data can be moved and what it costs in power to move it, and that Kearney's role is to help turn confidential discussions into commercial relationships. Fabric.AI trades on Nasdaq under the ticker FABC, while Kopin Corporation trades under KOPN.
FABC · Demand · Positive Fabric.AI engaged Kearney to commercialize Neural I/o and has NDAs plus technical discussions underway with leading semiconductor and data center firms.
KOPN · Demand · Positive Kopin is Fabric.AI's development partner on the Neural I/o platform, which has NDAs and technical talks underway with leading semiconductor and data center companies.
Narui Radar plans to acquire 51% stake in Xintai Communications for 162 million yuan, resuming M&A push into optical communications
Narui Radar announced on the evening of September 30 that it plans to use 162 million yuan of its own funds to acquire a 51% stake in Guangzhou Xintai Communication Technology Co., Ltd. After the transaction, Xintai Communications will become its controlling subsidiary. Founded in 2013, Xintai Communications focuses on integrated optical transmission systems and optical transmission optimization solutions. In 2025, it achieved revenue of 109 million yuan and net profit of 19.72 million yuan; in the first half of 2026, revenue was 66.43 million yuan and net profit was 13.14 million yuan. Using June 30, 2026 as the base date, the income approach valued the full equity of its shareholders at 317 million yuan, a premium of 385.58%, and this transaction adopts the income approach conclusion. The counterparty commits that Xintai Communications' non-GAAP net profit from 2026 to 2028 will be no less than 25 million yuan, 29 million yuan, and 38 million yuan respectively, representing a first-year commitment growth of about 30% compared with the 19.31 million yuan non-GAAP net profit in 2025. Earlier in March this year, Narui Radar terminated its plan, which had been in preparation for more than 14 months, to acquire a 100% stake in Tianjin Sigma Microelectronics Technology Co., Ltd. and withdrew all application documents.
Artificial Intelligence › Optical Interconnect & DCI Capital
688522.CG · Capital · Positive Naruida plans to acquire a 51% controlling stake in Xintai Communications for 162 million yuan, resuming its M&A push into optical communications.
Meta Unveils Petal Subsea Cable Linking US and France
Meta announced Petal on Sept. 21, a roughly 4,300-mile subsea cable connecting the U.S. and France that is expected to enter service in 2029 and will be the first to deliver petabit-scale capacity across an ocean. The cable will carry 1 petabit per second, or about 125,000 gigabytes per second, double what today's most advanced transoceanic cables can handle, using two-core fiber that fits two light paths inside each strand. Petal is one piece of a much larger seafloor empire: Meta says it has invested in more than 20 subsea cable projects touching every continent except Antarctica, led by Project Waterworth, announced in February 2025, which will stretch more than 31,000 miles and connect the U.S., Brazil, South Africa, India, and other regions across five continents. Petal is being developed with Japan's NEC and Sumitomo Electric Industries, with French telecom Orange handling the landing on France's Atlantic coast, while Waterworth will be wholly owned by Meta, only its third solely owned cable according to telecom research firm TeleGeography. Meta has not disclosed what Petal or Waterworth will cost, but TechCrunch reported before Waterworth's announcement that the project could top $10 billion, a small slice of the company's expected capital expenditures of $130 billion to $145 billion this year, nearly double the $72.2 billion it spent in 2025.
Coherent Jumps 10.5% After Bernstein Initiates With Outperform and $350 Target
Coherent shares jumped 10.5% in the afternoon session after Bernstein rated the materials and photonics company Outperform with a $350 price target, citing optical-module upside as data-center switches move to higher speeds. According to Streetinsider, Bernstein framed $350 as roughly 24% upside, valuing the stock at 22 times estimated 2028 earnings per share of $16, and argued optical-module demand should keep expanding with faster networking gear. Citi commentary tagging Coherent as an AI hardware beneficiary reinforced the bullish AI-infrastructure read-across, alongside investor focus on Coherent's PhotonLink optics platform and an AI security demo amid a broader bid in networking names. The move follows a 5.2% gain two days earlier on news that Coherent demonstrated scalable physical-layer security for artificial intelligence infrastructure developed alongside CUbIQ Technologies. Coherent is up 63.1% since the start of the year, but at $317.01 per share it still trades 25.7% below its 52-week high of $426.89 from June 2026.
Coherent, Lumentum, Ciena Surge as Bernstein Initiates With Outperform
Optical networking stocks rallied Thursday after Bernstein initiated coverage of the group with an Outperform rating, calling the companies structural AI winners. Coherent jumped 11%, Lumentum rose 7%, Ciena gained 7%, and Arista added 0.4%. Coherent led the move after launching PhotonLink, an optics platform for AI infrastructure that packages its services, photonics technologies, and components including lasers, fibers, and detectors into one platform for AI data centers. The company said it already has 20 customer engagements split between co-packaged optic and near-packaged optic assemblies, plus five engagements in emerging chip-to-chip connectivity. The gains extend a strong 2026 rally for the group, with Coherent up 73%, Lumentum up 183%, Ciena up 62%, and Arista up 56% year to date.
COHR · Capital · Positive Bernstein initiated coverage of Coherent with an Outperform rating as a structural AI winner.
COHR · Technology · Positive Coherent launched PhotonLink, an optics platform for AI infrastructure, with 20 customer engagements.
CIEN · Capital · Positive Bernstein initiated coverage of Ciena with an Outperform rating, calling it a structural AI winner.
LITE · Capital · Positive Bernstein initiated coverage of Lumentum with an Outperform rating, calling it a structural AI winner.
ANET · Capital · Positive Bernstein initiated coverage of the optical networking group with an Outperform rating, naming Arista among structural AI winners.
Volantis Raises $88M Series A for Photonic AI Inference System
Volantis, a semiconductor company building a new category of AI inference system, announced an $88 million Series A co-led by Lachy Groom and Abstract Ventures, with participation from John Doerr, VXI Capital, Triatomic and Susa Ventures, plus angel investors Dwarkesh Patel, Naveen Rao and Sholto Douglas. The company's first system, A-1, is being designed to run models exceeding 20 trillion parameters at up to 10,000 tokens per second per user while reducing inference cost per token. Volantis says A-1 will increase memory capacity and bandwidth simultaneously by nearly two orders of magnitude, using a photonic interconnect that connects compute chips to memory and aggregates the bandwidth of large numbers of memory chips into a unified pool. The architecture uses custom micro-VCSELs rather than external lasers, drawing on the existing gallium arsenide VCSEL supply chain and avoiding indium phosphide supply constraints, with end-to-end links consuming less than one picojoule per bit. The financing will support development and commercialization of A-1 and its photonic memory architecture, including expanding the engineering team, and Volantis plans to deliver its first integrated inference engines to customers in 2027.
Artificial Intelligence › Custom Silicon / ASIC Capital
Volantis · Capital · Positive Volantis raised an $88M Series A co-led by Lachy Groom and Abstract Ventures to fund development and commercialization of its A-1 photonic AI inference system.
JPT replies to private placement review inquiry, plans to raise no more than 1.373 billion yuan to fill expansion funding gap
Shenzhen JPT Opto-electronics Co., Ltd. disclosed its reply to the review inquiry letter regarding its issuance of shares to specific investors, with total funds to be raised not exceeding 1,372.97 million yuan. After deducting issuance expenses, the proceeds are intended for a high-density optical interconnect product manufacturing construction project, a JPT headquarters and R&D center upgrade construction project, and supplementary working capital. Of this, the high-density optical interconnect product manufacturing construction project is planned to receive 765.60 million yuan, the headquarters and R&D center upgrade construction project is planned to use 217.37 million yuan, and supplementary working capital is planned at 390.00 million yuan. JPT stated that its overall funding gap is estimated at 1,404.6439 million yuan, larger than the 1,372.97 million yuan financing size, so this financing is necessary. During the reporting period, the company's operating revenue was 1,225.6253 million yuan, 1,453.8462 million yuan, 2,074.0243 million yuan, and 1,487.0184 million yuan respectively, with a compound annual growth rate exceeding 30% over the past three years. In 2025 and the first half of 2026, the capacity utilization rates for optical fiber device products were 109.33% and 100.78% respectively. As of July 5, 2026, the order backlog for this business was 122.8067 million yuan, and cumulative intended orders of approximately 100 million US dollars are expected to be secured in 2026.
688025.CG · Capital · Positive JPT plans a private placement of up to 1.373 billion yuan to fund optical interconnect manufacturing, HQ/R&D upgrade, and working capital, addressing its funding gap.
688025.CG · Demand · Positive Article cites >100% capacity utilization, a 122.8 million yuan order backlog, and ~$100 million of intended 2026 orders for its optical fiber device business.
CScale Exits Stealth With $145 Million Series C for AI Optical Interconnect
CScale exited stealth, announcing $145 million in Series C funding to accelerate development and commercialization of optical interconnect for AI scale-up, bringing the company's total funding to $188 million. The round was co-led by Atreides Management, Valor Equity Partners, and Premji Invest, with Sutter Hill Ventures continuing its support alongside existing investor Maverick Silicon. NVIDIA and Intel Capital joined as CScale's first strategic investors. The Palo Alto company is architecting its interconnect to contain optical failures without interrupting compute, targeting the gigawatt-class AI data centers expected by the end of the decade, where a single scale-up domain will span thousands of tightly coupled accelerators across dozens of racks. CEO Martin Lund said lasers will fail but compute should not, and Atreides Management Managing Partner and Chief Investment Officer Gavin Baker said every optical failure is a compute failure at that scale.
Nokia Shares Rise 3% After Google's €13 Billion Finland AI Investment
Nokia Oyj shares rose 3% to $10.98 on September 9 after Google announced a €13 billion investment to expand its AI infrastructure and cloud footprint in Hamina, Finland. Google said its Hamina site, part of a 43-region network, lets local entities like Nokia deliver high-performance, low-latency services and scale AI solutions, though the announcement is not a direct contract win for Nokia. In Q2 2026, Nokia recorded a 105% year-over-year surge in net sales to AI and Cloud customers, supported by €2.8 billion in AI and Cloud order intake, while its Network Infrastructure division grew 12%, led by a 20% jump in Optical Networks and a 16% rise in IP Networks. Nokia closed Q2 2026 with €2.8 billion in net cash and interest-bearing financial investments, but the quarter also brought a reported operating loss of €50 million, a negative 1.0% reported operating margin, and a 95% year-over-year decline in reported profit to €5 million. Management said supply remains the main industry constraint relative to strong demand, and Nokia must manage negative short-term free cash flow, restructuring costs, and optical supply limits to convert hyperscaler demand into sustainable earnings growth.
Artificial Intelligence › AI Data Center & Build-out ▲Demand
GOOG · Capital · Positive Google announced a €13 billion investment to expand its AI infrastructure and cloud footprint in Hamina, Finland.
NOK · Capital · Negative Nokia reported a €50 million operating loss, negative 1.0% operating margin, and a 95% YoY profit decline to €5 million in Q2 2026.
NOK · Demand · Positive Google's Hamina AI/cloud expansion lets local entities like Nokia deliver low-latency AI services, supporting Nokia's AI and Cloud order intake and 105% sales surge.
Hengtong Optic-Electric hits limit down after disclosing 6.6 billion yuan private placement plan, wiping out 16.6 billion yuan in market value in one day
After Hengtong Optic-Electric disclosed a private placement plan exceeding 6.6 billion yuan and an employee stock ownership plan, its share price hit the daily limit down on Monday, closing at 60.64 yuan per share. Main capital recorded a net outflow of 1.86 billion yuan, and market value evaporated by 16.621 billion yuan that day. On September 25, Hengtong Optic-Electric disclosed its private placement plan, proposing to issue no more than 740 million shares to no more than 35 qualified investors and raise no more than 6.636 billion yuan. The proceeds will be used for a new-generation optical fiber research and production project, an Inner Mongolia high-end optical new materials construction project, a CPO advanced packaging research and development project, a Hengtong data intelligent connectivity project, an AI advanced optical interconnection project, the Hengtong Jieyang marine energy interconnection and smart operation and maintenance project, a 10,000-ton-class deep-sea cable-laying vessel investment and construction project, a Hengtong intelligent manufacturing industrial base project, and supplementary working capital. On the same day, the company unveiled a draft 2026 employee stock ownership plan, proposing to grant no more than 8.4368 million shares, or about 0.34 percent of total share capital, to no more than 222 participants including director and president Zhang Jianfeng, director and chief communications technology officer Tian Guocai, and vice president Liu Zhenhua, at a grant price of 34.27 yuan per share. In the first half of this year, Hengtong Optic-Electric achieved revenue of 42.026 billion yuan, up 31.13 percent year on year, and net profit of 3.12 billion yuan, up 93.38 percent year on year.
Artificial Intelligence › Optical Interconnect & DCI Capital
Cloud & Digital Infrastructure › Telecom Towers, Fiber & Colocation Capital
600487.CG · Capital · Negative Disclosed a 6.6 billion yuan private placement (share dilution) that drove the stock to limit down and wiped out 16.6 billion yuan in market value.
Credo Technology Adds 224G 1.6T Optical Transceivers to ZeroFlap Lineup
Credo Technology Group Holding Ltd has broadened its ZeroFlap optical transceiver offerings with a new 224G-based lineup targeting 1.6T port speeds for AI infrastructure. The new transceivers extend Credo's established 800G ZeroFlap reliability architecture to higher-speed 1.6T deployments across 2xDR4, 2xFR4, and DR8 form factors, and combine the company's 224G per lane optical DSP, its Kfir200 silicon photonics-based photonic integrated circuit, and its latest generation PILOT diagnostic and analytics platform. Credo is betting the lineup will capture a larger share of the AI data center interconnect segment, with experts projecting 1.6T optical transceiver shipments to expand through 2027. The company faces pricing pressure from rival optical transceiver and DSP providers chasing the same 1.6T opportunity, execution risk in scaling the integrated silicon photonics and DSP platform, and customer concentration, with its two largest customers accounting for 71% of fiscal Q1 2027 revenue. Institutional sentiment has strengthened, with 86 hedge funds holding positions by the end of Q2 2026 versus 59 in Q1 2026, while BlackRock is the largest institutional owner with 17.76 million shares, or 9.45% of outstanding shares, as of June 30.
Evercore ISI Upgrades Ciena to Outperform on AI Optical Demand
Evercore ISI upgraded Ciena Corporation to Outperform with a higher price target, citing the company's position as a dedicated optical systems provider for AI data centers. The upgrade came alongside a special call in which analysts highlighted Ciena's strong positioning in optical networking as artificial intelligence infrastructure expands across global data centers, and it was reinforced by upward earnings estimate revisions pointing to growing confidence that Ciena can capture rising demand for high-bandwidth AI connectivity. Ciena's narrative projects $11.1 billion in revenue and $1.8 billion in earnings by 2029, requiring 25.8% yearly revenue growth and a $1.4 billion earnings increase from $438.3 million today, and yields a $551.86 fair value, a 55% upside to its current price. Some of the lowest ranked analysts were already assuming revenue of about US$10.3 billion and earnings of roughly US$1.5 billion by 2029, yet still see sharper risks from commoditization and hyperscaler bargaining power than the consensus does. The biggest risk remains Ciena's dependence on a small group of hyperscaler and telco customers, whose spending plans can shift quickly.
NT partners with APTelecom to study feasibility of Thailand-US undersea cable THUS
National Telecom, or NT, has signed a memorandum of cooperation with APTelecom LLC in Singapore to study and assess the feasibility of investing in the Thailand-United States undersea cable project, known as THUS. The study will cover technical and financial aspects, the search for co-investment partners, environmental impact, and related regulations. The signing ceremony was attended by Colonel Sanpachai Huvanandana, President of NT, and Mr. Eric R. Handa, Chief Executive Officer of APTelecom, as signatories, with Mr. Puchong Anantasin, Permanent Secretary of the Ministry of Digital Economy and Society and Chairman of NT's board, together with a delegation from the United States Trade and Development Agency, or USTDA, witnessing the event. Colonel Sanpachai said the THUS project is a strategic investment approach to develop the country's digital infrastructure. APTelecom will study an open-access high-speed undersea cable system linking Thailand with the United States through partner countries in the ASEAN region. The network aims to meet rising connectivity demand from data center, cloud computing, and artificial intelligence businesses, as well as to support investment by global technology industries and enhance Thailand's potential as a regional digital connectivity hub. The cooperation is currently at the investment feasibility study stage, and the study results will inform consideration of how to proceed with the project in the next phase.
APTelecom LLC · Capital · Positive APTelecom signed the cooperation memorandum and will conduct the feasibility study for the THUS undersea cable system.
National Telecom Public Company Limited · Capital · Positive NT signed a memorandum with APTelecom to study feasibility of investing in the THUS Thailand-US undersea cable project, a strategic infrastructure investment.
NTT's Kawazoe Aims to Establish 'AI Sovereignty' Through IOWN, Targeting Social Implementation Around 2030
IOWN, the next-generation communications infrastructure using cutting-edge optical technology that NTT is researching and developing, is accelerating moves toward practical application. The technology replaces electrical signals with optical signals for information transmission and processing, achieving high capacity, low latency, and low power consumption, with full-scale adoption and social implementation targeted for around 2030. NTT Chief Executive Fellow and IOWN Global Forum Chairman Takehiko Kawazoe, who named the IOWN concept and heads the international promotion organization, pointed out that internet latency and the concentration of profits among a handful of giant IT companies create problems in fields such as autonomous driving, telemedicine, and national security, and expressed the view that 'AI sovereignty' must be protected through IOWN's characteristic ability to physically separate optical wavelengths by industry and by country. For broader adoption, the IOWN Global Forum, established in January 2020, now has nearly 175 member organizations, and NTT is pursuing collaboration with a diverse range of companies rather than going it alone. Kawazoe explained that the world's first invented optical transistor can theoretically operate on one-hundredth the energy of conventional technology, and even at the current stage can cut required energy to one-eighth, saying that delivering AI's value while curbing power consumption will lead to a sense of acceptance toward innovation.
9432.JP · Technology · Positive NTT is developing IOWN optical technology, including the world's first optical transistor, targeting practical social implementation around 2030.
Huilv Ecology Subsidiary Plans to Invest 309 Million Yuan to Expand High-Speed Optical Module Production
Huilv Ecology announced on the evening of September 27 that its controlling subsidiary, Wuhan Junheng Technology Co., Ltd., plans to invest 309 million yuan to build the Junheng Technology R&D and production base project in Wuhan East Lake High-tech Development Zone. The funding will come from its own funds or self-raised funds. The project was approved by the company's board of directors on September 24, does not involve related-party transactions, and does not require submission to the shareholders' meeting. After the project is completed, Junheng Technology's existing production line with an annual capacity of 1.5 million units will undergo a comprehensive technology upgrade, while the new base will add a production line with an annual capacity of 2 million high-speed optical modules. The total annual capacity for high-speed optical modules in the Wuhan area will reach 3.5 million units, after which the existing production facilities will no longer be used. The project will be implemented in two parts with phased coordination. The construction period for the R&D and production base is approximately 20 months, with construction planned from November 2026 to June 2028, and a proposed investment of 288 million yuan. The high-speed optical module R&D project is expected to take 3 months, with construction planned from April 2028 to June 2028, and an investment of approximately 21.5586 million yuan. The company stated that this project will help expand production capacity during a period of rising industry demand, ensure stable supply to customers, and reserve technical capabilities for next-generation products. The production capacity scale is broadly aligned with the current growth in market demand for 800G and 1.6T optical modules. In terms of performance, in the first half of 2026, Huilv Ecology achieved operating revenue of 1.037 billion yuan, up 49.01 percent year on year, while net profit attributable to the parent company was 27 million yuan, down 27.79 percent year on year. Revenue from optoelectronic device business was 958 million yuan, up 74.54 percent year on year, and its share of total revenue rose to 92.36 percent.
001267.CS · Capital · Positive Huilv Ecology's subsidiary plans a 309 million yuan investment to expand high-speed optical module capacity, a capex project approved by the board.
Semtech Shares Rise After Analyst Initiates Coverage With Buy Rating
Semtech shares jumped 2.8% in pre-market trading after analyst Jay Goldberg initiated coverage of the semiconductor company with a Buy rating and a $200 price target, citing expanding demand across artificial intelligence data-center infrastructure. According to TipRanks, the target implied roughly 18% upside from the previous closing price. In a note to clients, Goldberg wrote that Semtech has reinvented itself by moving away from its troubled legacy connectivity business to focus on data-center optical solutions, and highlighted that rising artificial intelligence workloads should provide a multi-year growth catalyst for its optical products through 2027 and 2028 as cloud providers expand high-speed data transmission capacity between computing clusters. After the initial pop, the shares cooled down to $178.25, up 2.1% from the previous close. Semtech is up 137% since the beginning of the year and is trading close to its 52-week high of $185 from September 2026.
Teradyne Launches Iris 100 Optical Test Platform as AI Revenue Tops 60% of Q2 Sales
Teradyne has introduced Iris 100, a production-ready optical test platform for microLED devices used in augmented-reality displays and optical interconnects for AI data centers, expanding its AI test portfolio against KLA Corporation and Cohu. The system measures individual emitters across arrays containing millions of microLEDs and integrates with Teradyne's UltraFLEXplus platform for combined optical and electrical testing, supporting wafer and final testing with advanced parallelization and image processing for high-throughput production. AI-driven revenues represented more than 60% of Teradyne's second-quarter 2026 revenues, while total revenues surpassed $1.3 billion, more than doubling year over year. Within that quarter, Semi Test revenues increased 128% year over year, compute revenues surged nearly 600%, and Product Test revenues rose 26% to $107 million. For the third quarter of 2026, Teradyne expects revenues in the range of $1.20-$1.30 billion. The Zacks Consensus Estimate for 2026 earnings is pegged at $9.10 per share, unchanged over the past 30 days and suggesting 129.80% year-over-year growth, while Teradyne shares have surged 101% year to date.
TER · Capital · Positive AI-driven revenues topped 60% of Q2 2026 sales with total revenues over $1.3 billion, more than doubling year over year, plus Q3 guidance of $1.20-$1.30 billion.
TER · Technology · Positive Launched the Iris 100 production-ready optical test platform for microLED and AI data-center optical interconnects, expanding its AI test portfolio.
Semtech Shares Jump 20.3% Since Q2 Earnings Beat, Q3 Guidance Set at $410 Million
Semtech shares have climbed about 20.3% in the month since its last earnings report, outperforming the S&P 500. The company posted second-quarter fiscal 2027 non-GAAP earnings of 71 cents per share, beating the Zacks Consensus Estimate by 14.5% and management's guidance of 61 cents, with revenue of $341.9 million topping the consensus by 4.1% and rising 32.7% year over year. Within that total, infrastructure sales reached $123.7 million, or 36.2% of net sales, up 69% year over year on data center strength, while industrial sales were $178.9 million, or 52.3% of net sales, up 25.1%, and high-end consumer sales were $39.3 million, or 11.5% of net sales, down 4.6%. LoRa-enabled sales set a record at $58 million, up 58% year over year, and the company expects 1.6T FiberEdge market share to exceed 50% by the end of fiscal 2027. For the third quarter of fiscal 2027, Semtech guided net sales to $410 million, plus or minus $5 million, with non-GAAP earnings of $1.05 per share, plus or minus 3 cents, and a non-GAAP gross margin of 58.3%.
Summary of announcements by Shanghai and Shenzhen listed companies on the evening of September 24: Sanan Optoelectronics' actual controller Lin Xiucheng detained; Hengtong Optoelectronics plans private placement to raise no more than 6.636 billion yuan
On the evening of September 24, multiple listed companies on the Shanghai and Shenzhen stock exchanges issued major announcements. Sanan Optoelectronics announced that it had received notice from the family of its actual controller Lin Xiucheng that Lin had been criminally detained by public security authorities on suspicion of embezzlement of his position and misappropriation of funds. Lin has not held any position in the company since July 10, 2017, and the company said the matter is unrelated to the company and will not have a material impact on production and operations. Hengtong Optoelectronics plans to issue shares to specific investors to raise no more than 6.636 billion yuan, for projects including research and production of next-generation optical fiber, construction of high-end optical new materials in Inner Mongolia, and research and development of advanced CPO packaging. Guanghuan Xinwang plans to make an additional investment of no more than 1.265 billion yuan in the Helinger intelligent computing center project, bringing total project investment to approximately 2.5 billion yuan and raising IT load capacity from 60 to 100 megawatts to 90 to 120 megawatts. China Life Insurance plans to subscribe for capital contributions of no more than 4.5 billion yuan in a partnership with total subscriptions of no more than 6 billion yuan, focusing on high-quality unlisted equity in the artificial intelligence and semiconductor sectors. Shandong Gold Mining has adjusted its 2026 gold production plan from no less than 49 tonnes to between 36 and 38 tonnes. The company's mined gold output in 2025 was 48.89 tonnes, and net profit attributable to the parent is expected to decline year on year in 2026. In addition, Zhongji Innolight completed a buyback of 5.6531 million shares for 4.997 billion yuan, Jifeng Auto Parts' controlling subsidiary received a nomination for a passenger car seat assembly project with an estimated total life-cycle value of 9.2 billion yuan, and EVE Energy plans to transfer a 45 percent stake in Hubei Enjie New Materials for 1.15 billion yuan.
Artificial Intelligence › AI Data Center & Build-out ▲Capital
Semiconductors › Advanced Packaging & Test (OSAT) Technology
Cloud & Digital Infrastructure › Telecom Towers, Fiber & Colocation Capital
Artificial Intelligence › Foundation Models & Research Labs ▲Capital
Semiconductors › Interconnect & Passive Components Capital
600487.CG · Capital · Positive Hengtong Optoelectronics plans a private placement to raise up to 6.636 billion yuan for optical fiber, optical materials, and CPO packaging projects.
600547.CG · Supply · Negative Shandong Gold Mining cut its 2026 gold production plan to 36-38 tonnes from no less than 49 tonnes, with net profit expected to decline year on year.
600703.CG · Regulation · Negative Sanan Optoelectronics' actual controller Lin Xiucheng was criminally detained on suspicion of embezzlement and misappropriation of funds.
601628.CG · Capital · Positive China Life Insurance plans to subscribe up to 4.5 billion yuan in a partnership focused on high-quality unlisted AI and semiconductor equity.
Seaport Initiates Marvell Coverage With Buy Rating and $270 Target
Seaport Research Partners initiated coverage on Marvell Technology with a Buy rating and a $270 price target, citing AI data-center demand for its custom silicon and interconnect businesses. Seaport said Marvell's optical connection technologies are used in accelerator platforms including those from Nvidia, giving the company access to ongoing data center expansion. The firm projected a current quarter non-GAAP gross margin of 58.25% to 59.25%, compared with 59.4% a year ago, and expects operating leverage to come mostly from managing operating expenses rather than meaningful gross-margin expansion. Seaport also started coverage on Semtech with a $200 target, saying its increasing focus on data-center optical devices should drive AI-related demand in 2027 and 2028. On Semiconductor received a $100 objective based on growing industrial and automotive demand with an expected 800-volt data-center build-out, and Seaport also liked ON's planned acquisition for Synaptics.
MRVL · Capital · Positive Seaport initiates Marvell with a Buy rating and $270 price target on AI data-center demand for custom silicon and interconnect.
ON · Capital · Positive Seaport starts ON Semiconductor with a $100 target, citing industrial/automotive demand and an expected 800-volt data-center build-out.
SMTC · Capital · Positive Seaport initiates Semtech with a $200 target, citing data-center optical devices driving AI-related demand in 2027-2028.
SYNA · Capital · Neutral Synaptics is only referenced as ON Semiconductor's planned acquisition target, not independently analyzed.
Stifel Reiterates Buy and $350 Target on Marvell After ECOC Meeting
Stifel reiterated a Buy rating and a $350 price target on Marvell Technology after meeting with executives at the ECOC 2026 optical communications conference in Malaga, Spain. Marvell told the firm it expects to sample 2nm products at the end of 2026, with production ramping in the second half of 2027 across PAM4 and coherent and coherent-lite modulation. Management argued that securing 2nm capacity, not just access to the node, is what sets it apart, and Stifel flagged pluggable optical modules as potentially underappreciated, with unit volume expectations rising across scale-up, scale-out and scale-across networks. Separately, Marvell has expanded its silicon-germanium capacity with GlobalFoundries to support its lead in transimpedance amplifiers, and management sees its XPU Attach business, the components that connect to custom AI processors, as a potentially bigger opportunity than the processor market itself, a case it may lay out at its October 6 Investor Day. Marvell shares were down 0.58% in premarket.
Artificial Intelligence › EDA & Semiconductor IP ▲Technology
MRVL · Capital · Positive Stifel reiterated a Buy rating and $350 price target on Marvell after the ECOC meeting.
MRVL · Technology · Positive Marvell said it expects to sample 2nm products at end-2026 with production ramping in H2 2027 across PAM4 and coherent modulation.
GFS · Demand · Positive Marvell expanded its silicon-germanium capacity with GlobalFoundries to support its transimpedance amplifier lead, a concrete capacity/order development for GF.
MACOM Unveils 3.2-Terabit Optical Chipset as BMO Upgrades Stock
MACOM Technology Solutions announced a 3.2-terabit optical chipset on September 17, built around eight 448-Gbps PAM-4 channels. A day later, BMO Capital upgraded the shares to Outperform with a $335 target, arguing that a 36% decline from the May peak had compressed MACOM's forward valuation to roughly 29 times earnings while data-center fundamentals remained intact. The new platform combines drivers, photodiodes and transimpedance amplifiers for next-generation optical modules, and the company says the components are already available rather than merely a research roadmap. The development puts Coherent Corp. directly in the conversation, since both companies supply the optical connectivity needed to keep larger AI clusters fed with data, though Coherent brings much greater scale in data-center optics. Hedge fund positioning diverged in the second quarter: MACOM ownership rose to 59 hedge funds from 45 in the first quarter, while Coherent ownership fell to 105 funds from 114. About 2.96 million MACOM shares were sold short at the August 31 settlement date, equal to roughly 3.9% of float with 2.4 days to cover.
MTSI · Capital · Positive BMO upgraded MACOM to Outperform with a $335 target, citing a 36% decline from the May peak that compressed forward valuation to ~29x earnings.
MTSI · Technology · Positive MACOM unveiled a 3.2-terabit optical chipset with eight 448-Gbps PAM-4 channels, components already available for next-gen optical modules.
COHR · Competition · Neutral Named as the larger-scale rival in data-center optics, with hedge-fund ownership falling to 105 funds from 114, but no company-specific development of its own.
SMT Jumps 7.63% as Broker Says PER Still Low, Stock Leads Group on AI-Driven Optical Orders
SMT shares surged 7.63%, or 0.45 baht, to 6.35 baht on trading value of 284.40 million baht, leading the electronics group higher across the board. KCE rose 1.49% to 68.00 baht, HANA gained 1.47% to 51.75 baht, DELTA added 1.19% to 255 baht, and CCET climbed 1.12% to 9.05 baht. Yuanta Securities (Thailand) said Star Microelectronics (Thailand) Public Company Limited, or SMT, posted second-quarter 2026 results that clearly reflect a recovery in revenue, capacity utilisation, and margins. The company guided 2026 revenue of no less than 2.6 billion baht and expects growth of more than 10% in 2027, or above 3 billion baht. It sees Optical and OSAT as new growth engines driven by AI. Although AI-related revenue still accounts for less than 5% of current revenue, it has the potential to rise to at least 10% next year. On valuation, the stock currently trades at a PER of about 19 times, significantly below the group's 28 to 58 times. The broker maintained its end-2027 target price of 7.60 baht per share, based on a PER of 25 times, and kept its 2026 normal profit forecast at 150 million baht, a turnaround from a loss of 146 million baht in 2025, before rising to 256 million baht in 2027, up 70% year on year.
Corning, Qualcomm and Lumentum to Showcase High-Density Optical Chip Links at ECOC 2026
Corning, Qualcomm and Lumentum plan to showcase a high-density die to die optical connectivity solution at ECOC 2026. The joint demo targets AI scale up architectures that require higher bandwidth, lower latency and tighter power budgets for chip interconnects, and the ECOC 2026 presentation will highlight massively parallel optical D2D links paired with high density fiber to support advanced AI data centers. The project taps Corning's existing role supplying fiber and optical technology to large infrastructure buyers rather than representing a completely new line of work, positioning its multimode fiber alongside Qualcomm's interface IP and Lumentum's VCSEL engines. The unresolved piece is commercial proof: the clearest early sign that this direction is working will be whether Corning starts pointing to concrete D2D or co packaged optics wins in its AI focused optical order book or in follow on agreements tied to the 2027 to 2032 style long term fiber deals already in place.
Artificial Intelligence › EDA & Semiconductor IP Technology
Artificial Intelligence › Edge & On-device AI Silicon Technology
GLW · Technology · Positive Corning will showcase its multimode fiber in a high-density die-to-die optical connectivity demo for AI data centers at ECOC 2026.
LITE · Technology · Positive Lumentum's VCSEL engines are part of the joint high-density optical D2D interconnect demo at ECOC 2026.
QCOM · Technology · Positive Qualcomm's interface IP is featured in the joint high-density die-to-die optical connectivity solution for AI scale-up architectures.
GlobalFoundries Partners With SMART Photonics to Expand Photonics Portfolio
GlobalFoundries Inc. is expanding its photonics presence through a new partnership with SMART Photonics. The collaboration will offer an open-access manufacturing service combining silicon and indium phosphide photonics, helping customers develop next-generation optical products that move data faster and more efficiently. The move builds on accelerating demand for optical networking technologies in AI and data center applications: in the second quarter of 2026, GlobalFoundries' communications infrastructure and data center business recorded 62% year-over-year revenue growth, its seventh consecutive quarter of double-digit growth. The company works with four of the five largest optical transceiver players and is moving toward 1.6 terabit and 3.2 terabit optical modules, with production of its 200-gigabit-per-lane technology already underway. The financial contribution from the SMART relationship will likely take some time to show up in results, though strong AI and optical networking demand is expected to boost the photonics portfolio in the long run.
Analog Devices Expects Double-Digit Growth Into Fiscal 2027 on Data Center and Industrial Demand
Analog Devices Chief Financial Officer Rich Puccio said the company expects demand strength across its portfolio to support double-digit growth into fiscal 2027, citing a broad industrial recovery alongside continued momentum in data centers, aerospace and defense, and automated test equipment. Speaking with JPMorgan analyst Harlan Sur at the firm's 2026 U.S. All Stars Conference in London, Puccio said aerospace and defense, automated test equipment, and data centers account for roughly 30% of the company's business and have been growing at high rates. The aerospace and defense business was nearing a $2 billion annualized revenue run rate as of the fiscal third-quarter exit rate, up from approximately $1 billion a year earlier, while the automated test equipment business was operating at an annualized run rate of about $1 billion and the data center business is running at about $2 billion annually, split roughly equally between power and optical products and growing about 100% year over year. Puccio declined to provide a mid-quarter bookings update or formal guidance for the January quarter but said Analog Devices expects to perform better than its normal seasonal pattern, in which the first fiscal quarter is typically down in the mid-single digits sequentially. He said more than half of the company's industrial subsegments remain double digits below the consumption line, that the company guided for a record gross margin in the fourth quarter, and that its pending acquisition of Alif Semiconductor is not expected to be material to revenue or costs in the near term, with the business more likely to ramp beginning around 2028.
Artificial Intelligence › AI Power & Cooling ▲Demand
ADI · Demand · Positive CFO cites broad industrial recovery plus data center, aerospace/defense, and ATE momentum supporting double-digit growth into fiscal 2027.
Alif Semiconductor, Inc. · Capital · Neutral Analog Devices' pending acquisition of Alif Semiconductor noted as not material near term, ramping around 2028.
Credo's Toucan Gen6x16 Retimer Added to PCI-SIG Integrators List
Credo Technology Group Holding Ltd has had its Toucan Gen6x16 PCI Express retimer officially added to the PCI-SIG Integrators List after completing testing at the PCI-SIG Compliance Workshop, where it achieved formal PCI-SIG 6.x compliance at 64.0 GT/s. The listing validates Toucan's interoperability, electrical compliance and protocol credentials in high-speed connectivity and reduces qualification and customer integration risk. Toucan uses Credo's PILOT software to combine PCIe 6.0 with DSP-based SerDes technology, deep diagnostics and low-power operation, targeting high-performance computing and artificial intelligence environments, and Credo says the architecture aligns with PCIe 7.0 roadmaps. Credo also points to its recent acquisition of DustPhotonics, which adds silicon photonics to its DSP, SerDes and system integration stack and is expected to make the combined optical portfolio a significant growth driver in FY27. Credo faces competitive pressure as other retimer vendors pursue PCI-SIG compliance, and adoption timing depends on GPUs, CPUs and platform vendors shifting to the new standard.
Marvell Debuts Industry-First 2nm Optical Interconnects at ECOC 2026
Marvell Technology unveiled industry-first 2nm optical interconnect solutions for AI data centers at ECOC 2026 on 21 September 2026. The new 2nm products target higher bandwidth for AI clusters and aim to support growing data movement inside hyperscale facilities, with Marvell highlighting power efficiency features and integrated security for AI networking workloads. The launch spans 2nm 400G-per-lane PAM4, 800G ZR/ZR+ with MACsec and 1.6T ZR demos, extending Marvell's presence across both inside-the-rack links and data center interconnect. Marvell Technology develops semiconductor solutions that move and process data across data centers and network edges, and it already operates at a scale that reflects its US$214.2b market value. The company said the next proof points will be design wins and production ramps rather than demos, with investors watching attach rates into 1.6T and 3.2T switches, adoption of the 800G ZR/ZR+ pluggables with MACsec in hyperscale networks, and customer wins tied to the 102.4 Tbps CPO platform over the next product cycles.
Cloud & Digital Infrastructure › Mega-cap Hyperscalers Technology
MRVL · Technology · Positive Marvell unveiled industry-first 2nm optical interconnect solutions for AI data centers at ECOC 2026, advancing its product portfolio.
Barclays Starts Tower Semiconductor at Overweight With $310 Target
Barclays initiated coverage of Tower Semiconductor with an Overweight rating and a $310 price target in a September 18 research note, citing the company's position in the silicon photonics foundry market. Tower Semiconductor has already secured approximately $1.3 billion in contracted business to supply chips for optical connectivity in AI data centers, announced in May, along with roughly $290 million in customer advance payments to support production demand for its silicon photonics business. The company holds a leading position in the pluggable optical market and is expanding into Silicon Photonics, Silicon Germanium, and advanced packaging as AI data center deployments accelerate. Hedge fund interest rose to 64 holders in the second quarter from 54 in the first, while short interest stood at about 2.23% of shares as of August 31. Risks include customer concentration, intensifying competition in next-generation optical connectivity, and any slowdown in hyperscaler capital spending.
Morphotonics raises €40M to scale nanoimprint lithography into data centers
Dutch nanoimprint lithography startup Morphotonics has raised €40 million to scale up production and push into optical components for data centers. The round, part of an extended raise that began in 2024 and was gathered in multiple installments, was backed by 3M Ventures, Innovation Industries, BOM, and Invest-NL, with participation from the European Innovation Council Fund, Dutch family office Ernij Next, and the European Investment Bank. Morphotonics spent 12 years developing its nanoimprint lithography process, which creates a stamp applied to photosensitive materials to make displays for augmented reality glasses, privacy screens for cars, and the waveguides used in smart glasses such as the Meta Ray-Ban Display, Even Reality, and Magic Leap. The company has used the funding to more than double its headcount to 60 employees from roughly 30 in September 2024, when CEO Hugo Da Silva joined, and expects headcount to stabilize around 70 to 75 people. Its next machine, currently being built, will be capable of producing more than 6 million waveguides a year and is expected to start shipping early next year, while the data-center push targets co-packaged optics using Photonic Integrated Circuits, an area where it has not yet shipped machines but says customers have validated its technology. Roughly 90% of revenue currently comes from hardware sales, with 10 to 15 systems deployed globally, and the company expects to reach 50 deployments in the next two to three years.
Morphotonics · Capital · Positive Morphotonics raised €40M from 3M Ventures, Innovation Industries, EIC Fund and others to scale production and expand into data-center optics.
