Lumentum CEO Warns of Upcoming Indium Phosphide Shortage in AI Infrastructure
At the RAISE Summit, Lumentum CEO Michael Hurlston warned that indium phosphide (InP), a critical semiconductor material used in optical components for data centers and AI infrastructure, is facing an acute shortage. He predicted this bottleneck could surpass current memory shortages in severity due to rapidly increasing demand from companies like NVIDIA. Hurlston explained that InP enables light emission essential for lasers in transceivers, amplifiers, and co-packaged optics (CPO) engines used alongside GPUs. Scaling production of non-silicon materials is particularly challenging as the industry moves from thousands to millions of wafers per year. Lumentum reported a supply-demand imbalance exceeding 30%. NVIDIA has invested in both Lumentum and its competitor Coherent, which also produces InP components. Despite strong demand for their products, companies like Lumentum (LITE), Coherent (COHR), AXTI (AXTI), and Applied Optoelectronics (AAOI) have all seen significant stock declines recently.
Topics: AI data_center_infrastructure indium_phosphide (InP) Lumentum NVIDIA