Irrational Analysis
Semiconductor Engineer, Engineering-Driven Investment Analysis
Sivers' lasers fall short for co-packaged optics on yield, power and reliability. Its yield is horrific, wavelength variation is bad, and output power and reliability are not good enough. Discrete lasers at 160 mW per wavelength give far better cost per milliwatt, and Ayar Labs and AMD, supposedly Sivers' big customer, are committed to the OCI MSA spec requiring at least 20 dBm per wavelength. x.com x.comÂ
China's already-shipping CW lasers make Sivers' Chinese pluggable pipeline depend on price and qualification speed. Yuanjie says its 70/100mW chips, the classes Sivers lists, are in continuous large-volume delivery. It guides Q3 revenue up 265-293% and expects new capacity from end-2026 to early 2027, before Sivers' Q4 2027 Glasgow expansion. Yuanjie's 120/300/400mW parts remain in customer validation; Western hyperscaler qualification is probably where Sivers still has time. x.com x.com x.com … Show more
Sivers Semiconductors' AI optics rally prices in more than its photonics business has shown. About 75% of revenue is still wireless mmWave. Its 50-75mW CW lasers suit 400G and 800G but trail tier-1 rivals, making it a tier-2 spillover supplier like Applied Optoelectronics. Its small, old Glasgow fab has $50-150 million of potential laser revenue, with no sign of major expansion. Its multi-wavelength laser arrays for CPO are pre-revenue as Nvidia and Broadcom build their own. x.comÂ
Optics and photonics should be among AI's biggest winners as faster GPU networks need optical connections that suppliers cannot expand quickly enough. Lumentum says some components are sold out through early 2029; Sivers is investing $30M to target more than 100M lasers a year, with operations expected in Q4 2027. Potential US restrictions on Chinese transceivers could reshape supply in 2027. Applied Optoelectronics and Sivers are the favorites. x.com x.comÂ
Marvell risks paying a peak-scarcity price for Lumentum if optical supply catches up by 2028-30. The proposed ~$99B deal values Lumentum at roughly 20x guided annualized revenue and 58x estimated after-tax operating income, while Lumentum, Coherent and Chinese suppliers are adding laser capacity. The DSP-and-laser combination has strategic logic, but durable scarcity economics and Nvidia's response remain uncertain. x.comÂ
Sivers Semiconductors' lasers look too low-powered to compete with Lumentum, Coherent and Applied Optoelectronics in co-packaged optics. Its 65 mW DFB chip is far below the 300-400 mW CPO needs, while Lumentum showed an 800 mW laser at OFC 26. Sivers is pushing DFB arrays with Ayar Labs, but high-power DFB designs, not arrays, should win adoption for the next 2-3 years. @aleabitoreddit counters that 65 mW is per channel. Sivers works as a trade but is very speculative as a mid- to long-term bet. … Show more
More lasers per module and new 400G DSPs could keep the pluggable-optics runway open for years, supporting Lumentum, Coherent, Marvell, Applied Optoelectronics and Sivers even as co-packaged optics approaches. NVIDIA and Cisco co-designed a module with four times the bandwidth in the same slot; fewer modules per GPU look bearish, but the added optical content points the other way. x.comÂ
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.comÂ
Tighter Lumentum laser allocations would strengthen Coherent's pricing power if Marvell's rumored acquisition leads it to prioritize Nvidia and its own modules. Other buyers would face tighter supply, and hyperscalers would push harder to second-source lasers from Coherent. x.comÂ
Sivers Semiconductors has a real, qualified design win with GlobalFoundries, answering short-seller doubts about its AI pipeline. GlobalFoundries is integrating Sivers' indium-phosphide laser arrays into its silicon photonics platform and SCALE co-packaged optics engines, the high-bandwidth, low-power interconnects AI clusters need. @MoodyWriter13 notes it is not a supply contract and has no delivery timeline or committed volume, but as a design win it is a big deal. x.com x.comÂ
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.comÂ
