Silicon Photonics' optical transceiver market share is estimated to exceed 50% by 2027. $TSM VP of Advanced Packaging said today that silicon photonics is becoming the mainstream form thanks to the structural transformation of optical transceivers. He also stated that the real bottleneck for large-scale deployment lies in lasers, optical fibers, fiber optic connectors, and product testing. If I was to pick the "main" players instead of just name-dumping: - $LITE / $COHR: InP lasers - CW for SiPh, ELS for CPO, 200G EMLs - $AEHR: SiPh WLBI testing - $GLW: PM fibre, fibre arrays & MPO/MTP connectivity - Sumitomo Electric (5802): InP lasers + substrates Obviously you've got a ton of other names from: $AAOI for InP lasers, $IQE for InP base epi, $BESI for hybrid bonding and $KEYS / $VIAV for optical test. Feels like TSMC have been running the same narrative alongside the COUPE roadmap for a while now though. But always good to get some re-confirmations on where everyone's favourite bottlenecks sit / narratives coming from TSMC themselves.

TW silicon photonics names are unstoppable! 🥳 Based on $TSM’s current guidance, 2027 EPS is estimated at around NT$200. At 20–25x P/E, that’s NT$4,000–5,000/share, or roughly US$3.24–4.05tn market cap. Assuming Xi doesn’t invade us first 😂 Can you imagine how much liquidity could get sucked into the Taiwan stock market if $TSM actually trades there? US$4tn would put TSM alone close to the size of the entire UK stock market today. And TW photonics micro caps can easily 5–10x riding this wave, I think.

- Tower Semiconductor ($TSEM) and NewPhotonics have begun high-volume shipments of laser-integrated silicon photonics optical engines, with current production products supporting 800G and 1.6T. - The key technology is $TSEM's PH18DA SiPho platform, which heterogeneously integrates InP devices to combine lasers, SOAs, modulators, and photodetectors on a single PIC. - NewPhotonics' NPG102 uses a 200G-per-lane architecture for 800G and 1.6T PICs, targeting optical architectures ranging from FRO/LRO/LPO and XPO pluggables to NPO. - The more important next step is the 6.4T NPC505 chipset, a CPX-MSA-compliant NPO solution scheduled for volume shipment in 1H27, targeting both scale-out and scale-up AI interconnects. - $TSEM says NewPhotonics is the first customer to bring heterogeneous laser-integrated optical engines on PH18DA into high-volume production, although specific customers and shipment volumes were not disclosed. > The most important phrase here is “high-volume shipment.” This suggests $TSEM's silicon photonics platform has moved beyond PDKs, tape-outs, and prototypes into actual volume manufacturing of laser-integrated PICs. > Integrating the laser, SOA, modulator, and detector around a single PIC can reduce component count and optical-engine assembly complexity. As AI interconnects evolve from pluggables toward NPO and eventually CPO, the value of a highly integrated, scalable SiPho foundry platform could increase materially. > From an investment perspective, the key point is that $TSEM is increasingly becoming more than a legacy analog foundry and is beginning to establish itself as a merchant SiPho foundry tied directly to AI optical connectivity volume production. With 800G/1.6T already shipping and 6.4T NPO targeted for 1H27, the $TSEM SiPho story is gradually shifting from future optionality to a production ramp story.

We're excited to announce a strategic collaboration with @GlobalFoundries to develop advanced silicon photonics solutions for the rapidly growing AI infrastructure market. Our laser arrays will support next-generation optical connectivity architectures, including CPO, LPO, and other emerging data center interconnect solutions, while complementing GlobalFoundries' silicon photonics platform and SCALE™ optical engine offerings targeting a projected $25 billion pluggable optics market by 2030. For full details, visit:

- $MRVL is demonstrating a 102.4 Tbps CPO platform at ECOC, using 200G/lane silicon photonics, 6.4 Tbps optical engines, and detachable ELSFPs. - The platform directly targets the reach and power limitations of copper as AI scale-up networks expand. > $MRVL is moving beyond traditional networking silicon toward a broader AI connectivity platform spanning custom silicon, SerDes, optical DSPs, silicon photonics, and CPO. > As AI infrastructure scales, $MRVL’s strategic importance could continue to increase.

- OpenLight recruits experienced SiPh talent from GlobalFoundries, signaling continued focus on silicon photonics execution - Addition of semiconductor industry veteran suggests scaling toward manufacturing and commercialization phase > OpenLight is strengthening its executive bench with proven SiPh talent and semiconductor manufacturing expertise, suggesting the company is transitioning from development toward production readiness and market deployment.

Taiwan's GlobalWafers: "Supply constraints have emerged in 12 inch wafers" Taiwan's GlobalWafers has formally acknowledged a shortage in silicon wafers. At its second quarter earnings conference call on the 4th, GlobalWafers said an imbalance between supply and demand in the semiconductor wafer industry is already underway, adding that its 12 inch (300mm), 8 inch (200mm) and 6 inch (150mm) lines have effectively reached maximum utilization and that supply constraints have already emerged for some advanced 12 inch products. Orders have surged on rising demand from AI semiconductors, high bandwidth memory (HBM), silicon photonics and advanced packaging. The company explained that the shortage has become a reality as logic makers, not only memory makers, move to secure long term capacity. The shortage is appearing across the wafer industry. Germany's Siltronic said in its earnings release on the 30th of last month that inventories at memory and logic customers are normalizing and that customers have begun rebuilding wafer safety stock, adding that this restocking is expected to increase wafer demand further and that new customers as well as existing ones are requesting 300mm volumes. Japan's Shin-Etsu Chemical, the global number one, also said in its earnings release on the 24th of last month that 300mm wafer shipments grew at double digit rates both year over year and quarter over quarter. Japan's SUMCO likewise assessed in May that customer inventory adjustment was entering its final stage. SK Siltron is expanding capacity by bringing equipment at its new fab online in stages, but the pace of order growth is understood to be outrunning that. The way long term agreements (LTAs) are struck is also changing. In the past the purpose was for customers to secure stable volumes, but recently they have taken on a stronger character of locking up capacity ahead of a shortage. Contract terms are also lengthening from around three years to five to eight years. Last month GlobalWafers signed a 10 year LTA with Micron, the longest in the wafer industry. The contract begins next year and includes strategic financial support in the nature of a prepayment. Most of its revenue in the second half of this year and the first half of next year is also expected to come from LTAs. Shin-Etsu Chemical said it currently supplies all of its 300mm wafers under LTAs. Siltronic supplies two thirds of its volume through LTAs. Memory customers are requesting volumes for delivery two to three years out. Moves to raise prices are also emerging. With supply tight, prices have begun to rise first in the non LTA (spot) market. Siltronic said prices for 300mm non LTA wafers have started to rise. GlobalWafers also expects spot prices in the second half of this year to be higher than in the first half. Price increases are expected to spread to LTAs as well. GlobalWafers said it is discussing price increases with customers to reflect higher raw material, energy, logistics and labor costs, adding that while LTAs already signed will maintain their contracted prices, new contracts will reflect not only price and volume but also price adjustment mechanisms, product mix and market changes. Siltronic likewise stressed that with some LTA renegotiations coming up in 2027 and 2028, prices need to recover to levels that allow reinvestment, and that broad and meaningful price increases are necessary. The wafer industry had previously gone through roughly two years of simultaneous shipment declines and price pressure as customer inventories built up sharply from 2023. Customer inventories of 300mm wafers then turned lower from late 2025, and months of inventory also declined from the first quarter of this year, completing the inventory correction. The industry is understood to have turned from the second quarter of this year. A deeper shortage and full scale price increases are expected to appear from the second half of 2027. Rising utilization at existing semiconductor lines is currently driving shipment growth, but once new memory fabs from Samsung Electronics, SK hynix and Micron come online, wafer demand is expected to rise to roughly double current levels.

We’re pouring more and morepower into copper just to move bits a few meters – and paying for it in cooling. Silicon photonics slashes interconnect power per bit, easing the power/cooling crunch and freeing budget for compute, not heat. #Datacenters# #EnergyEfficiency#