"Severe InP Shortage Triggers Largest Price Hike Ever" - $AXTI. Suppliers have bluntly stated that "even if you have the money, you still may not be able to get the material" (lol). - Industry sources revealed that InP substrate prices began rising in Q4 last year and was the fourth consecutive substrate price hike. - The latest Q4 hike is expected to be >10%, - Meanwhile, prices for epitaxial wafers made from those substrates have already been raised two times, and the market is moving toward a 3rd consecutive increase in Q4. (I also wrote a thesis on $IQE, which benefits here too). Article states VPEC, Landmark, IET benefits (Taiwan centric reporting). I did predict this last year... The bottleneck is real, but I do have higher expectations for price hikes that comes next. Glad it's starting to play out.

Rosenblatt InP lasers checks: According to our checks, NVIDIA, which is the driving force behind scale up CPO, asked the supply chain to increase InP laser capacity by ~20x from 2025-2030. The vendors appear to have taken a more conservative stance, agreeing to an ~12x increase ( $AAOI / $LITE etc)

With how InP is going, here's Marvell's turn to raise price on select products... "Your Marvell and distribution account team will provide details on affected products & pricing changes". Sounds like a customized price increase for selected items & customers 🤣

Prices of Indium Phosphide (InP) substrates and epi-wafers are set to jump over 10% in the 4th quarter – the biggest price hike in history – as the AI-driven optical communications boom causes severe shortages, media report. One supplier reportedly said inventory is so tight that “even with cash, you might not get anything.” InP substrate prices have risen for three consecutive quarters and are heading into a fourth, while epi-wafers are entering their third consecutive increase. Valued for high-frequency, high-speed data transmission, InP is a critical material as AI data centers shift from copper to optical interconnects (optics in, copper out.) $AXTI $SMTOF #SumitomoElectric# 5802 $LITE $COHR $AAOI

Will China still allow InP exports to the U.S.? I’m very bearish on AXTI. Now I’m starting to wonder whether U.S. companies will even be able to use CXMT DRAM. Not financial advice. Do your own research.

China's control over InP exports threatens AI data centre rollout (Reuters). With 70%+ control over global output. Just as a reminder on beneficiaries: -> JX Advanced Metals: ~10% InP share -> $AXTI: InP >50% Q1'26 rev -> $LITE: maybe the cleanest large cap beneficiary -> $COHR: ~1 yr early to 6-inch InP production -> $IQE: InP is "material growth driver throughout 2026 and beyond" Sumitomo Electric win in non-Chinese InP but they're so huge that InP revenue is basically a rounding error to them. Personally treating $AXTI as a trading vehicle separately to my core hold rn after taking decent profits over the past few weeks. As core holds, I have preference to $LITE / $COHR / $IQE over $AXTI for InP-thematic exposure w/ less regulator risks. - $LITE for lower China supply beta. - $COHR for higher InP permit torque if u want it. - $IQE for the most asymmetry

This $AXTI / InP substrate export controls is EXACTLY why: Trump's America 1st policies should focus around securing its supply chains over in EU/Japan/KR. And weaponizing it against China. US alone has leverage, but everyone together has extreme leverage. If you use Japan to cut off China's humanoid program / upstream chemicals and leverage EU to cut off China's photonics program: They'll bend for substrates and rare earths. You literally need to break their frontier industry development over yields or actually manufacturing the components. Not just threaten 40% tariffs to stop them from shipping cheap goods.

$SIVE announced today that it is expanding InP manufacturing in Glasgow. The new capacity target is: ~100 million CW DFB laser annual production. Using Sivers’ historical $50-$100 per 8-laser array pricing, the implied revenue capacity might be ~$625M-$1.25B/year (not guidance, just illustrative modeling) I’m personally very surprised by the amount of capacity coming online from their new hybrid manufacturing model, targeted Q4 2027. Especially during an industry shortage, mentioned by $AVGO earnings call today.