AI | Semiconductors | Commodities, Mint Finance

Raghav Vashisht

AI | Semiconductors | Commodities

Deep Fundamental Analysis

Mint Finance

Mint Finance's investment research blends deep fundamental analysis with technical & quant insights. Investment strategies straddle across multiple asset classes with risk management embedded into every trade to deliver an outsized reward-to-risk ratio.

Mint Finance's research is centered around three key themes. First, energy transition and climate change. Second, artificial intelligence. Third, shifting world order with its impact across politics and monetary economics.

Thematic (Sector/Industry)

<ul>
<li>CPO architectures do not eliminate InP demand; escalating power requirements for Continuous Wave lasers expand die size and crush wafer yield, potentially increasing substrate intensity per module.</li>
<li>Merchant InP supply is tighter than headline capacity implies. While all are increasing capacity, Sumitomo is increasingly captive, AXT’s export cadence dictates revenue, and JX remains a minor player.</li>
<li>While the market tracks indium prices, a major supply chain anchor is 7N red phosphorus, where a near-monopoly is held by two Japanese companies dictating substrate production limits.</li>
</ul>


CPO architectures do not eliminate InP demand; escalating power requirements for Continuous Wave lasers expand die size and crush wafer yield, potentially increasing substrate intensity per module.
Merchant InP supply is tighter than headline capacity implies. While all are increasing capacity, Sumitomo is increasingly captive, AXT’s export cadence dictates revenue, and JX remains a minor player.
While the market tracks indium prices, a major supply chain anchor is 7N red phosphorus, where a near-monopoly is held by two Japanese companies dictating substrate production limits.


[Part 1: The Materials Chokepoint] Looking Into (And Past) The Indium Price Story

<ul>
<li>Advantest disclosed its first large high‑volume ATE order for silicon photonics, guiding to at least two more years of doubling growth in this line, while holding operating margins above 44%</li>
<li>FormFactor’s results show record revenue, a 45% YoY jump in Probe Cards, a 30% increase in Foundry &amp; Logic revenue, with NVIDIA crossing the 10% customer threshold.</li>
<li>Moving on, we map how others, i.e. Teradyne, MPI, ficonTEC, Aehr, Keysight, Lumentum, etc fit around this core and which of them keep or gain structural leverage in the stack.</li>
</ul>


Advantest disclosed its first large high‑volume ATE order for silicon photonics, guiding to at least two more years of doubling growth in this line, while holding operating margins above 44%
FormFactor’s results show record revenue, a 45% YoY jump in Probe Cards, a 30% increase in Foundry &amp; Logic revenue, with NVIDIA crossing the 10% customer threshold.
Moving on, we map how others, i.e. Teradyne, MPI, ficonTEC, Aehr, Keysight, Lumentum, etc fit around this core and which of them keep or gain structural leverage in the stack.


[Part 3] What Advantest and FormFactor’s Earnings Say About CPO’s Bottleneck

<ul>
<li>Co-Packaged optics delivers real power savings, but removing the DSP transfers signal integrity, thermal management, and yield risk from a correctable chip onto the physical assembly; a less forgiving environment.</li>
<li>CPO adds irreplacibility as another constraint, turning a $300 module swap into a potential scrap event on a high-value assembly. This makes yield (and testing) the defining economic constraint.</li>
<li>The $20 billion by 2036 CPO market is not in dispute. But the investment opportunities are not uniformly distributed, spread across packaging, thermal architecture, and test infrastructure.  </li>
</ul>


Co-Packaged optics delivers real power savings, but removing the DSP transfers signal integrity, thermal management, and yield risk from a correctable chip onto the physical assembly; a less forgiving environment.
CPO adds irreplacibility as another constraint, turning a $300 module swap into a potential scrap event on a high-value assembly. This makes yield (and testing) the defining economic constraint.
The $20 billion by 2036 CPO market is not in dispute. But the investment opportunities are not uniformly distributed, spread across packaging, thermal architecture, and test infrastructure.  


[Part 1] Co-Packaged Optics: The Case For, and the Fine Print

AI and Energy Infrastructure, Explained Plainly, The Physical Layer

The Physical Layer

AI and Energy Infrastructure, Explained Plainly

A journal on the physical constraints behind the AI buildout: power, grid connection, data centres, cooling and the supply chains that gate them. Written to be understood by anyone.

Equity Bottom-Up

<ul><li>Lumentum makes the tiny lasers that turn data into light, so AI chips can talk to each other across a data centre.</li><li>Those lasers have to be grown on a fragile crystal that only a few factories in the world can work at volume, and demand is running well ahead of supply.</li><li>That is why Nvidia, a chip company, paid $2 billion to make sure Lumentum builds more of them.</li></ul>

Lumentum makes the tiny lasers that turn data into light, so AI chips can talk to each other across a data centre.Those lasers have to be grown on a fragile crystal that only a few factories in the world can work at volume, and demand is running well ahead of supply.That is why Nvidia, a chip company, paid $2 billion to make sure Lumentum builds more of them.

Nvidia paid Lumentum $2 billion for lasers, because silicon cannot make light

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>2025 has proven a standout year for optical transceiver suppliers with high AIexposures, with key suppliers posting stellar revenue growth and material margin expansion.</li><li>We expect this outperformance to persist through 2026 and beyond, underpinned by an unabated AI infrastructure investment cycle and a sustained mix shift to higher-value solutions.</li><li>We reiterate the sector as one of our top picks. Reiterate our BUY rating on Innolight (300308 CH, BUY, TP: RMB591.00), the 2024 global optical transceiver market leader, positioned to benefit from surging overseas AI capex and 1.6T demand.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

2025 has proven a standout year for optical transceiver suppliers with high AIexposures, with key suppliers posting stellar revenue growth and material margin expansion.We expect this outperformance to persist through 2026 and beyond, underpinned by an unabated AI infrastructure investment cycle and a sustained mix shift to higher-value solutions.We reiterate the sector as one of our top picks. Reiterate our BUY rating on Innolight (300308 CH, BUY, TP: RMB591.00), the 2024 global optical transceiver market leader, positioned to benefit from surging overseas AI capex and 1.6T demand.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Semiconductors - Optical transceivers – sustained AI-driven outperformance ahead

United States

Coherent Corp. designs engineered materials and optoelectronic components. The Company offers products to industrial, optical communications, military, life sciences, semiconductor equipment, and consumer markets. Coherent also manufactures semiconductor lasers and optics for high power industrial lasers, optical communications systems, datacenter connectivity, and 3D sensing.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Coherent (COHR US)

[Part 1: The Materials Chokepoint] Looking Into (And Past) The Indium Price Story

AI optics demand crushes InP yield. Supply is squeezed with Sumitomo captive and AXT export-bound. Yet Japan's 7N red phosphorus monopoly is the...

Mint Finance

[Part 3] What Advantest and FormFactor’s Earnings Say About CPO’s Bottleneck

Advantest and FormFactor see strong growth in silicon photonics and probe cards, with potential for continued expansion in the semiconductor...

Mint Finance

[Part 1] Co-Packaged Optics: The Case For, and the Fine Print

Co-Packaged optics offers power savings, but risks signal integrity and yield issues, making yield and testing the key economic constraints in the...

Mint Finance

Nvidia paid Lumentum $2 billion for lasers, because silicon cannot make light

Lumentum makes the tiny lasers that turn data into light, so AI chips can talk to each other across a data centre. Those lasers have to be grown...

The Physical Layer

Semiconductors - Optical transceivers – sustained AI-driven outperformance ahead

2025 has proven a standout year for optical transceiver suppliers with high AIexposures, with key suppliers posting stellar revenue growth and...

CMB International

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Part 1: The Materials Chokepoint] Looking Into (And Past) The Indium Price Story

AI optics demand crushes InP yield. Supply is squeezed with Sumitomo captive and AXT export-bound. Yet Japan's 7N red phosphorus monopoly is the...

Mint Finance

[Part 3] What Advantest and FormFactor’s Earnings Say About CPO’s Bottleneck

​Advantest and FormFactor see strong growth in silicon photonics and probe cards, with potential for continued expansion in the semiconductor...

Mint Finance

[Part 1] Co-Packaged Optics: The Case For, and the Fine Print

​Co-Packaged optics offers power savings, but risks signal integrity and yield issues, making yield and testing the key economic constraints in the...

Mint Finance

Nvidia paid Lumentum $2 billion for lasers, because silicon cannot make light

Lumentum makes the tiny lasers that turn data into light, so AI chips can talk to each other across a data centre. Those lasers have to be grown...

The Physical Layer

Semiconductors - Optical transceivers – sustained AI-driven outperformance ahead

2025 has proven a standout year for optical transceiver suppliers with high AIexposures, with key suppliers posting stellar revenue growth and...

CMB International

Advantest and FormFactor see strong growth in silicon photonics and probe cards, with potential for continued expansion in the semiconductor...

Co-Packaged optics offers power savings, but risks signal integrity and yield issues, making yield and testing the key economic constraints in the...