Lumentum says AI laser capacity is booked into early 2029

Top News · Reported · digitimes.com

AI data center networking depends on laser chips used in optical links. Those chips are now a capacity bottleneck, and Lumentum says its indium phosphide laser capacity is committed into early 2029. Indium phosphide, or InP, is the material behind these lasers for data center optics.

Here's what's happening:

• The shortage of InP lasers is getting worse rather than easing.
• AI networking is bottlenecked at a small number of laser chipmakers, limiting where extra capacity can come from.
• Lumentum's largest customers are beginning to share the financial risk of expanding capacity.

One catch: adding capacity takes years, so sharing that financial risk does not make new capacity available immediately.

Why care? AI networking capacity is constrained by a small number of laser chipmakers, and expanding their capacity takes years.

Sources: digitimes.com