Data centers embrace the "optical interconnection era"! Lumentum (LITE.US) accelerates the expansion of laser production capacity, which is essential for both GPU and TPU systems.

Alphabet Inc. Class C TPU AI Computing Power Chain's core participant and essential optical/optical module component supplier for "NVIDIA Corporation and AMD AI GPU-series AI Computing Power Chain," Lumentum (LITE.US) plans to establish a new large manufacturing plant in Greensboro, North Carolina, USA. This plant will cater to AI computing infrastructure leaders such as NVIDIA Corporation, AMD, Cerebras Systems, as well as Microsoft Corporation, Meta, and Alphabet Inc. Class C, who are leading the construction of the world's largest AI data centers by producing advanced lasers. The 240,000 square foot plant is currently operational and will be transformed for the production of Lumentum's InP-based data center optical interconnect products, including continuous wave lasers and high-power lasers, essential components for large AI data centers. The factory is expected to begin mass production in mid-2028. NVIDIA Corporation (NVDA.US), the "AI chip superpower," will be the first major customer of this large manufacturing facility. Lumentum stated that they acquired the site for the large factory from another US semiconductor manufacturer, Qorvo (QRVO.US), and selected the location due to the highly skilled high-quality workforce, well-established infrastructure, and supportive economic environment at both federal and state levels. The acquisition agreement includes the transfer of an experienced team of semiconductor manufacturing employees, which will enable Lumentum to accelerate the expansion of production capacity for optical interconnect products that are urgently needed for the global AI data center construction wave and efficiently increase actual production. Michael Hurlston, CEO of Lumentum, stated, "Our customers are building the AI computing infrastructure that will define the next generation of supercomputing. The addition of this InP manufacturing facility will significantly expand our actual production capacity, deepen our strategic cooperation with partners, and ensure that we can deliver the performance, reliability, and scale required for the AI technology revolution." Lumentum plans to invest hundreds of millions of dollars in the coming years to expand the factory's capacity and continue to enhance advanced manufacturing capabilities while retaining and creating over 400 high-end manufacturing jobs in the US. Lumentum is reaping the benefits of AI infrastructure! Regardless of whether NVIDIA Corporation's GPU or Alphabet Inc. Class C TPU technology route dominates, it will continue its bullish trajectory. Regarding the bullish prospects of Lumentum's stock price, many Wall Street Financial Institutions, Inc. are increasingly optimistic about the strong continuation of the company's stock price following a 340% increase in 2025a clear AI computing theme "super bull stock" in the global stock market. The stock price has soared by an incredible 110% so far this year. The main logic behind the extreme bullish trend of Lumentum's stock price since 2025 lies in the company's ability to benefit from both the Alphabet Inc. Class C TPU AI computing industry chain and the AI GPU-series computing industry chain led by NVIDIA Corporation. In the future, whether it is the NVIDIA Corporation AI GPU computing infrastructure cluster or the Alphabet Inc. Class C TPU cluster (TPU represents the AI ASIC technology route), both cannot function without the "optical and silicon optical high-speed interconnection capabilities represented by Lumentum." In AI super clusters such as TPU and GPU, there is a common core feature: the need for high bandwidth, low latency, and high energy efficiency internal interconnects in data centers. Traditional copper cables or electronic switching solutions cannot meet the demands when expanded to thousands or even tens of thousands of chips due to the explosive growth in power consumption and heat loss; optical interconnect technology (primarily including Co-packaged Optics, silicon photonics switches, and Optical Circuit Switches) can use light signals to replace electrical signals, significantly improve bandwidth density and energy efficiency in large-scale AI training/inference networks, reduce latency and power consumption. This demand for higher optical interconnect capacity is a common thread in GPU and TPU clusters. For example, NVIDIA Corporation's Spectrum-X/Quantum-X silicon photonics network switches explicitly integrate laser and photon technologies to improve power efficiency and network capacity, and Lumentum's high-performance lasers and optical components are an essential part of these switches. In Alphabet Inc. Class C's Jupiter/AI data center network system, OCS (Optical Circuit Switch) clusters have been extensively integrated into the architecture to support TPU AI systems and large-scale training/inference systems. Lumentum's R300/R64 OCS products are specifically aimed at "large-scale cloud computing + AI/ML data center networks": using MEMS optical paths to establish direct optical connections between endpoints, bypassing intermediate electrical switching and OEO conversion, with a focus on high port counts, low latency, and low power consumption. In the future, especially in the NVIDIA Corporation AI GPU computing cluster, Lumentum, due to its capital, production capacity, and research and development capabilities, is likely to become a primary beneficiary on key optical interconnect links such as UHP laser/ELS/CPO/OCS. Lumentum is very likely to be a "key arms dealer" in the future AI optical interconnect wave, particularly crucial for NVIDIA Corporation's GPU chain. An analyst team led by Ruben Roy from Stifel stated in an investor report last week that Lumentum announced an expected long-term quarterly revenue run rate of up to 20 billion dollars at the OFC conference, leading to a more optimistic outlook for the company's stock price than ever before. The expected expansion level of "approximately 20 billion dollars quarterly revenue run rate" corresponds to an annualized revenue expectation of approximately 80 billion dollars, significantly stronger than the current quarterly and annual performance. In the quarter ending December 27, 2025, the company's revenue reached 665.5 million dollars, an explosive increase of 65.5% year-on-year, hitting the high end of the guidance range. OFC 2026 - Increasing Confidence in the "Power of Light" Looking at the overall development trend of data center optical interconnection at OFC 2026, the industry's main line is becoming increasingly clear: the bottleneck of ultra-large-scale AI data centers is shifting from single-chip computing power to "cluster-level interconnect bandwidth, energy consumption, and scalability." Lumentum can be considered the manufacturer of key components of optical communication (lasers, optical devices suppliers), with some shipments of optical module products and subsystems. However, its core technological advantage lies in being able to exclusively build the most basic optical sources and high-speed optical devices platform, which are extensively integrated into various optical modules and optical communication systems in large AI data centers. Lumentum is not like Broadcom Inc., focusing on ASIC/DSP-based platforms or Coherent, placing a broad range of optics companies such as silicon photonics, VCSEL, and InP-on-silicon in the forefront; Lumentum is truly strong and attractive to Wall Street funds in the hardest-to-expand areas of AI optical interconnects, such as InP lasers, EML, Ultra-High Power Lasers (UHP), external laser sources, and OCS. The latest product launches of the three optical giants Broadcom Inc., Coherent, and Lumentum indicate a clear direction: 1.6T has transitioned from a "research topic" to the eve of mass production, and 400G/lane is becoming the new physical layer foundation for 3.2T, 12.8T, and even larger-scale AI clustersan increasingly essential option for the high-performance network architecture optimized for artificial intelligence data centers. By the end of the 2026 fiscal year, Lumentum expects EML production capacity to grow by over 50% compared to 2025. The company has already advanced about 40% of its InP expansion plan and predicts that by 2030, the demand for InP in AI data centers will have a compound annual growth rate of 85%. Lumentum expects the compound annual growth rate (CAGR) of OCS shipments between 2025 and 2028 to exceed 150%, with a target of achieving annual revenue of over 1 billion dollars in 2027.