Optical Supply Chain: What would you buy?

This week, we move from optics technology to optics companies. We walk the AI optical supply chain from bottom to top. Main debate: Who has a moat? Who is already priced for perfection? *Not investment advice, do your own due diligence*
AXTI - Indium phosphide substrate supplier. Critical bottleneck in the laser stack. Major China export-control risk. Massive stock run vs thin earnings.
Tower Semiconductor - Leading silicon photonics foundry. 5x capacity expansion with customer prepayments. Strong process lock-in. Pure-play optics exposure.
GlobalFoundries - 300mm monolithic photonics platform + Chips Act support. Optics growing fast but still small piece of overall business.
Lumentum - Dominant EML laser supplier. Explosive AI demand. Strong technical moat. Valuation and capex sensitivity are key risks.
Coherent - Vertically integrated from substrate to module. 6-inch InP push could lower costs structurally. Execution and margin mix matter.
Fabrinet - Optics assembly partner. High NVIDIA exposure. Scales with industry, but dependent on upstream supply.
Corning - AI data centers require far more fiber than traditional cloud. $6B Meta deal adds visibility. Timing of scale-up optics is the swing factor.
Timestamps
00:01 Intro
06:59 AXT $AXTI
13:38 Tower Semiconductor $TSEM
23:58 GlobalFoundries $GFS
32:43 Lumentum $LITE
39:38 Coherent $COHR
47:09 Fabrinet $FN
54:07 Corning $GLW
Austin's Substack: chipstrat.com
Vik's Substack: viksnewsletter.com