Co-packaged optics standards could make finished transceiver modules smaller and more interchangeable as chip designers build optical engines inside their packages. That is another reason to avoid Lumentum, Coherent and Applied Optoelectronics and prefer Soitec. Lumentum and Coherent now earn a lot from finished modules, leaving them exposed if the architecture changes. x.com 

IQE is hard to call undervalued because its price already embeds a mature-margin scenario two-plus years out. At a 15% margin and 20% yearly growth, FY28 EBITDA is about GBP25 million, worth about GBP500 million at a generous 20x, versus a GBP520 million market cap at 40p. IQE earns about 3% adjusted EBITDA margins versus LandMark's high-margin epi, MACOM's convertible and warrants carry about 76 million shares of overhang, and InP supply constraints threaten its H2-weighted guide. x.com  x.com  … Show more

IQE's new multi-year InP epiwafer supply deal with Tower Semiconductor shows its product is irreplaceable, adding a third Tier-1 foundry anchor in the AI photonics stack after Lumentum and MACOM. IQE is the non-Chinese InP source Tower needed, a geopolitical moat, and is designed into the optical roadmap from 200G pluggables to 400G-per-lane modulators and optical circuit switches. Tower, which IQE sued for IP theft in 2022, even granted IQE a royalty-free patent license. x.com 

IQE's bottleneck position in AI optics is already priced in, so the easy money is gone until its revenue and profits grow. Per @jpinsights, IQE grows the indium phosphide epiwafers high-speed lasers are built from, and validation came through MACOM's GBP45m investment, Tower's multi-year supply deal and a GBP81m raise. But the stock has rerated hard, and it is unclear whether any of this has reached IQE's own numbers. x.com 

AI bandwidth demand still favors Coherent and Lumentum, but tight customer financing can delay orders and lasting valuations need durable profits. A model provider losing share need not reduce total bandwidth use. Coherent could beat and raise guidance; Lumentum may only meet estimates this quarter, improving next quarter. If margins partly reflect scarce indium phosphide, added supply will test whether upgrades, volume and cost gains sustain earnings. These earnings calls remain forecasts. … Show more

IQE is the chokepoint to own in the indium phosphide shortage, because the scarcity lives at the substrate level rather than in lasers. The tell is MACOM buying 11% of IQE to lock up indium phosphide supply. @aleabitoreddit points to MACOM's earnings call, where customers came with urgency over the shortage of indium phosphide DFB lasers, as validation for laser makers like Sivers and Lumentum. x.com 

IQE's 43% first-half revenue growth overstates the recovery, because the group is still slightly smaller than two years ago. Photonics is a genuine breakout at £38.5m, 44% above H1 2024, but wireless at £26.0m remains a third below that level and is still recovering. A £4.0m working-capital outflow absorbed the margin gain, 61% of May's £81m raise went to lenders, and depreciation runs about nine times capex. Converted InP lines delivering H2 volume without more capex would prove efficiency. … Show more

AXT supplies the InP substrates that expanding optical manufacturing requires. It supplies every manufacturer, and that demand will take its shares to new all-time highs. Applied Optoelectronics is expanding capacity and selling the most cost-efficient product; a quoted post reports that Lumentum's CEO said his firm is effectively sold out through nearly 2029. x.com 

IQE's new multi-year indium phosphide epiwafer supply deal with Tower Semiconductor puts a 5x-10x move from March 2026 levels in the works, and IQE is the pick over Tower itself. Per Wall St Engine, the wafers support Tower's silicon photonics platforms for AI data center optics, including 200G/lane pluggable transceivers, 400G/lane modulator prototypes and optical circuit switches. The two also settled their IP dispute, with Tower granting IQE a worldwide royalty-free license. x.com  x.com 

Applied Optoelectronics is in the right place at the right time but isn't a high-quality business; it mainly serves as spillover capacity when Lumentum, Coherent and Marvell can't meet demand, so why own it over Marvell? Management also draws terrible Glassdoor reviews, 1.7 of 5 stars, 1% CEO approval and 7% recommending it across 124 reviews, pointing to high turnover and operating risk. The tone of its earnings call was also off-putting. x.com  x.com  x.com