Jay🐐

almost 2 years ago

https://t.co/VocP9tQ9IW

vibe_crypto retweeted

Rand Group

@randgroup

28 days ago

Copper can't keep up with AI. That's not an opinion, it's physics. Every data center being built right now is replacing electrical connections with light. NVIDIA confirmed it with $4.5 billion in direct investment. I mapped 25 public companies across the photonics value chain: Every AI cluster being built today hits the same wall. A hundred thousand GPUs mean nothing if the data can't move between them fast enough. Copper maxed out years ago and photonics replaced it: lasers, optical fiber, and transceivers that push data at the speed of light. The AI transceiver market doubled in two years. NVIDIA committed $4.5 billion across three photonics companies this year alone. This is where the infrastructure money is going. Here's the full value chain: 🔬 MATERIALS & WAFERS This is the bottom of the chain. Every laser and transceiver starts as a wafer substrate: indium phosphide, gallium arsenide, germanium, specialty glass. Nobody above this layer can produce anything without these inputs, and right now the most critical one, indium phosphide, is the tightest material in the entire AI supply chain. The gap between demand and capacity is getting worse, not better. I think this is the most asymmetric layer on the map. Investors chase the transceiver companies and ignore who grows the substrates underneath them. But NVIDIA is writing checks worth billions in cash and warrants to lock up supply from this exact layer. First link in the chain, last to get attention, and the one that chokes everything above it if it breaks. Tickers: $GLW, $AXTI, $IQE, $AIXA, $AMS 💡 CORE PHOTONIC DEVICES This layer converts electricity into light and back. Without it, zero data moves through fiber. NVIDIA dropped $4 billion into two companies here this year just to secure production capacity, and both of them joined the S&P 500 within weeks of each other. That should tell you how fast this went from niche to essential. The supply gap is not closing. The companies shipping next gen lasers at volume can be counted on one hand, and switching suppliers takes years of requalification. Order books stretch past twelve months. Every next generation GPU cluster consumes more of these components than the last, and no one can substitute them on short notice. I watch this layer more closely than any other. Tickers: $IPGP, $COHR, $LITE, $LASR, $SIVE 🔌 COMPONENTS & MODULES The companies here take raw lasers and detectors, package them into finished transceivers and modules, and ship them straight to hyperscalers. If the layers below are the engine, this is the vehicle that actually reaches the customer. Hyperscaler purchase orders land here. The revenue acceleration shows up here first. What I like about this layer is that you can underwrite it today, not in two years. These are businesses with signed capacity commitments and product already moving. The consolidation angle matters too: larger photonics players have already started absorbing standalone module companies, and whoever remains independent gains pricing power as options thin out. Tickers: $AAOI, $MTSI, $VIAV, $LPTH ⚙️ SYSTEMS & EQUIPMENT No company above this layer can manufacture a single photonic component without the machines built here. One of these names holds 100% of the EUV lithography market with zero competitors. Others supply the bonding equipment for co packaged optics or the process control instruments used across the majority of advanced packaging lines. If photonics is the gold rush, this is the layer selling the picks. My honest take: this is where the smart, patient capital parks. Equipment companies have pricing power and multi year order books that generate cash through full capex cycles. They attract holders who don't panic on the first pullback. The stocks don't run 1,000% overnight, but they compound while everything above them swings, and that tradeoff is worth more than most people give it credit for. Tickers: $ASML, $BESI, $ASM, $LPKF, $MKSI 🔍 TEST, METROLOGY & YIELD The most ignored layer on this map, and arguably the one with the cleanest business model. Every wafer, laser, and transceiver has to be tested and verified before it ships. As speeds climb and photonic devices get more complex, the testing challenge compounds fast. The industry is now constrained not only by what it can build but by what it can prove actually works. Yield is money. Better defect detection means better margins for every company upstream, which is why foundries keep buying test equipment even when they slash budgets everywhere else. These are capital light businesses tied to every unit of production across the chain. Last check before product hits the customer, and one of the few layers where demand doesn't cycle down when the rest of semis softens. Tickers: $CAMT, $FORM, $AEHR, $ONTO, $VIAV 🧠FINAL THOUGHTS The NVIDIA capital concentration tells the whole story. One company wrote $4.5 billion in checks to three photonics suppliers in a single quarter. That is a company locking down the one input that could bottleneck its GPU deployments: the optical interconnect. Returns across this sector have been historic over the past twelve months. But separate the revenue growers from the narrative trades. Some of these companies are printing real quarterly numbers that would impress in any sector. Others are carrying multi billion dollar market caps on sub $100 million in annual revenue. Same sector, wildly different risk. Every generation of AI infrastructure from here forward needs more photonics. Not less. The copper to light transition inside data centers is early. Co packaged optics is barely in deployment, and 1.6T transceivers are ramping with 3.2T already on roadmaps. The chain locks together: stress on any single link reprices every link above it.

randgroup's tweet photo. Copper can't keep up with AI. That's not an opinion, it's physics.

Every data center being built right now is replacing electrical connections with light. NVIDIA confirmed it with $4.5 billion in direct investment.

I mapped 25 public companies across the photonics value chain:

Every AI cluster being built today hits the same wall. A hundred thousand GPUs mean nothing if the data can't move between them fast enough. Copper maxed out years ago and photonics replaced it: lasers, optical fiber, and transceivers that push data at the speed of light. The AI transceiver market doubled in two years. NVIDIA committed $4.5 billion across three photonics companies this year alone. This is where the infrastructure money is going.

Here's the full value chain:

🔬 MATERIALS & WAFERS

This is the bottom of the chain. Every laser and transceiver starts as a wafer substrate: indium phosphide, gallium arsenide, germanium, specialty glass. Nobody above this layer can produce anything without these inputs, and right now the most critical one, indium phosphide, is the tightest material in the entire AI supply chain. The gap between demand and capacity is getting worse, not better.

I think this is the most asymmetric layer on the map. Investors chase the transceiver companies and ignore who grows the substrates underneath them. But NVIDIA is writing checks worth billions in cash and warrants to lock up supply from this exact layer. First link in the chain, last to get attention, and the one that chokes everything above it if it breaks.

Tickers: $GLW, $AXTI, $IQE, $AIXA, $AMS

💡 CORE PHOTONIC DEVICES

This layer converts electricity into light and back. Without it, zero data moves through fiber. NVIDIA dropped $4 billion into two companies here this year just to secure production capacity, and both of them joined the S&P 500 within weeks of each other. That should tell you how fast this went from niche to essential.

The supply gap is not closing. The companies shipping next gen lasers at volume can be counted on one hand, and switching suppliers takes years of requalification. Order books stretch past twelve months. Every next generation GPU cluster consumes more of these components than the last, and no one can substitute them on short notice. I watch this layer more closely than any other.

Tickers: $IPGP, $COHR, $LITE, $LASR, $SIVE

🔌 COMPONENTS & MODULES

The companies here take raw lasers and detectors, package them into finished transceivers and modules, and ship them straight to hyperscalers. If the layers below are the engine, this is the vehicle that actually reaches the customer. Hyperscaler purchase orders land here. The revenue acceleration shows up here first.

What I like about this layer is that you can underwrite it today, not in two years. These are businesses with signed capacity commitments and product already moving. The consolidation angle matters too: larger photonics players have already started absorbing standalone module companies, and whoever remains independent gains pricing power as options thin out.

Tickers: $AAOI, $MTSI, $VIAV, $LPTH

⚙️ SYSTEMS & EQUIPMENT

No company above this layer can manufacture a single photonic component without the machines built here. One of these names holds 100% of the EUV lithography market with zero competitors. Others supply the bonding equipment for co packaged optics or the process control instruments used across the majority of advanced packaging lines. If photonics is the gold rush, this is the layer selling the picks.

My honest take: this is where the smart, patient capital parks. Equipment companies have pricing power and multi year order books that generate cash through full capex cycles. They attract holders who don't panic on the first pullback. The stocks don't run 1,000% overnight, but they compound while everything above them swings, and that tradeoff is worth more than most people give it credit for.

Tickers: $ASML, $BESI, $ASM, $LPKF, $MKSI

🔍 TEST, METROLOGY & YIELD

The most ignored layer on this map, and arguably the one with the cleanest business model. Every wafer, laser, and transceiver has to be tested and verified before it ships. As speeds climb and photonic devices get more complex, the testing challenge compounds fast. The industry is now constrained not only by what it can build but by what it can prove actually works.

Yield is money. Better defect detection means better margins for every company upstream, which is why foundries keep buying test equipment even when they slash budgets everywhere else. These are capital light businesses tied to every unit of production across the chain. Last check before product hits the customer, and one of the few layers where demand doesn't cycle down when the rest of semis softens.

Tickers: $CAMT, $FORM, $AEHR, $ONTO, $VIAV

🧠FINAL THOUGHTS

The NVIDIA capital concentration tells the whole story. One company wrote $4.5 billion in checks to three photonics suppliers in a single quarter. That is a company locking down the one input that could bottleneck its GPU deployments: the optical interconnect.

Returns across this sector have been historic over the past twelve months. But separate the revenue growers from the narrative trades. Some of these companies are printing real quarterly numbers that would impress in any sector. Others are carrying multi billion dollar market caps on sub $100 million in annual revenue. Same sector, wildly different risk.

Every generation of AI infrastructure from here forward needs more photonics. Not less. The copper to light transition inside data centers is early. Co packaged optics is barely in deployment, and 1.6T transceivers are ramping with 3.2T already on roadmaps. The chain locks together: stress on any single link reprices every link above it.

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vibe_crypto retweeted

Cæsar 🏦

@PARABOLIT

about 2 months ago

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PARABOLIT's tweet photo. You can now short coins on-chain

From your wallet, with a non-custody escrow, running on immutable code

Against as many people who will accept your bet https://t.co/cF8qrOexWW

3 months ago

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Who to follow

3 months ago

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4 months ago

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vibe_crypto retweeted

Cæsar 🏦

@PARABOLIT

4 months ago

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4 months ago

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vibe_crypto retweeted

4 months ago

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vibe_crypto retweeted

4 months ago

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vibe_crypto retweeted

4 months ago

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vibe_crypto retweeted

4 months ago

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