Davy
Small-Cap Investor, Archetype-Research, Undercovered Companies & Data-Center Supply Chains
MicroLED's poor prospects and growing expert enthusiasm for VCSEL could put ams OSRAM on more investors' radars. An ams OSRAM optical-interconnect executive says a 1.6T active linear cable was demonstrated using the company's micro-emitter engine with Credo's help, and their short-reach micro-optics partnership continues. x.com x.com x.com
ams OSRAM's mature VCSEL expertise could make it the supplier to optical-interconnect firms without their own VCSELs. If it wins that role, it opens a massive market that is not currently priced in. Its collaboration with Credo on an AI data-center optical standard will probably lead to a supply agreement later; Lumentum and Coherent have their own VCSELs. The VCSEL story might also spark a speculative run-up before fundamentals validate it, though fundamentals are moving in its favor. x.com x.com x.com
Credo's first 1.6T active linear cable uses micro-VCSEL instead of microLED, putting the preferred optical technology into that product. Credo has finally acknowledged the pivot, and micro-VCSEL remains the much-favored approach. x.com x.com x.com
Credo's MicroVCSEL offers upside that does not appear priced in. Its copper and optics exposure, a SpaceX tailwind and fundamentals that look too good for its current valuation make it one of the tidiest AI infrastructure investments. x.com
ams-OSRAM is a dying company because its core LED lighting business has been annihilated by Chinese competition. It makes both LEDs and VCSELs, but most of its business is still LED. x.com
Credo's leading AEC position and vertical integration keep its optics thesis bullish despite SpaceX moving away from 1.6T AECs. That shift is a genuine risk, but xAI has been in Credo's AEC ecosystem the longest, which could support ZeroFlap optics and its telemetry software. Credo's VCSEL-based ALCs were still ramping toward 2027, giving it another route as customers move to transceivers. x.com x.com x.com
ams-OSRAM's €570M sale of its non-optical sensor unit to Infineon is a key catalyst: it roughly halves debt and frees resources for its pivot into AI photonics such as MicroLED, after legacy units kept it from focusing on AI growth. Its CEO says photonics revenue could come as early as 2027, probably slightly optimistic. MicroLED is a niche contrarian to mainstream CPO, but ams-OSRAM has rare high-volume MicroLED manufacturing experience. It stays a high risk-reward bet on uncertain adoption. … Show more
Wafer-tested VCSEL arrays could erode Lumentum's laser scarcity premium if scale-up links adopt wide, parallel designs. Lumentum's in-rack demo used arrays but does not replace every high-power laser; Credo and ams OSRAM seek approval for a parallel-link standard in 2027. Multiple suppliers would pressure pricing power and margins. Near-term earnings could still benefit from laser shortages, with Lumentum sold out through early 2029. x.com
Rising 1.6T switching demand favors optical suppliers, though their execution risks vary. Bank of America says the market could grow ~101% annually through 2030. Marvell's leading DSPs and Lumentum's supply-short 200G EML lasers are lowest risk; Applied Optoelectronics' capacity expansion and Fabrinet's customer concentration make them medium risk. Aeluma remains pre-commercial, while Lightwave Logic's polymer modulators are a high-risk moonshot despite its TSM partnership. x.com
Optical transceiver demand exceeds supply, and 1.6T lifts revenue per module for suppliers able to qualify capacity. Applied Optoelectronics raised at least $1.62B through 2026 ATMs; its last reported monthly capacity was 200,000 modules versus a year-end target above 650,000. Credo expects over $600M in FY2027 revenue across optical DSPs, PICs and modules, not modules alone. Shipments, yields and margins must prove out. Lumentum and Coherent already price in much expected growth. x.com
ams OSRAM's pivot to digital photonics could look remarkably cheap in hindsight if micro-photodiodes and AR microLEDs scale as AI hardware shifts to optics. Its micro-photodiode arrays target parallel optics in AI clusters, reusing high-volume microLED packaging. Q2 revenue of €805M and a 16.9% adjusted EBITDA margin hit the top of guidance; core semis grew 13% like-for-like, with €1.6B of design wins. Refinancing cut interest by about €40M, though 2026 remains a transition year. x.com
Credo has fallen over 40% since early July even as its microLED cable story improved, and that gap is the opportunity. On the September 1 call, CEO Bill Brennan said its microLED active cables reach 30 meters, carrying copper-like reliability and power beyond the rack, and called it just step 1 toward scale-up. Published data already works around the dispersion physics skeptics cite. The open question is production cost, set by fiber bundles and equalizers. First revenue is still in fiscal 2028. … Show more
