Serenity said Lumentum CEO Michael Hurlston has warned that the indium phosphide, or InP, laser supply chain serving AI data centers is facing a shortage more severe than the one affecting memory chips. According to the post, Lumentum could still ship more than 30% below customer demand even with its five InP wafer fabs, pointing to a growing bottleneck in optical communication components as AI infrastructure spending rises. Serenity said current supply pressure is centered on EML, or electro-absorption modulated lasers, though the broader InP laser shortage could keep spreading. The post added that it remains constructive on what it called bottleneck investment opportunities across the optical communications laser supply chain, naming Applied Optoelectronics, Sivers Semiconductors, Lumentum, and Coherent as companies being watched. Serenity also argued that as capital expenditures on AI data centers continue to climb, infrastructure segments such as optical modules and lasers, which it said had been undervalued by the market, are being repriced, with InP laser constraints emerging as a possible limiting factor in AI compute expansion.
Odaily reported that Serenity said Lumentum CEO Michael Hurlston has warned of a supply shortfall in indium phosphide, or InP, lasers used in AI data centers, with the gap described as more severe than the shortage affecting memory chips.
Serenity said that even with Lumentum's five InP wafer fabs, shipments could still come in more than 30% below customer demand. In its view, that points to a bottleneck in critical optical communication components as AI infrastructure buildout continues.
Pressure is concentrated in EML
According to Serenity, the current supply strain is mainly concentrated in EML, or electro-absorption modulated lasers, though the shortage in InP lasers could continue to spread.
Serenity said it remains positive on what it called bottleneck investment opportunities in the optical communications laser supply chain, highlighting Applied Optoelectronics (AAOI), Sivers Semiconductors (SIVE), Lumentum (LITE), and Coherent (COHR).
It added that as capital spending on AI data centers keeps increasing, infrastructure segments such as optical modules and lasers, which it said the market had previously undervalued, are being repriced. Serenity said InP laser supply constraints may become a key limiting factor in the expansion of AI computing capacity.
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