AI "Let there be light"! LITE and COHR said one thing in the second quarter: supply does not meet demand

According to news from the Chasing Wind Trading Platform, based on the latest research report from Nomura Securities, the strong performance of optical communication giants Lumentum (LITE) and Coherent (COHR) in the second quarter reveals a key signal: the optical communication industry chain is facing a serious supply-demand imbalance driven by the global AI infrastructure construction boom.

Nomura stated that this round of AI-driven optical communication industry prosperity cycle has a sustainability and growth potential that far exceeds previous market expectations. The structural shortage in the supply chain is creating unprecedented profit opportunities for the entire industry chain.

Upstream chip manufacturers are entering a golden period, with the ongoing shortage of EML chips and silicon photonic chips driving chip manufacturers to enjoy higher gross margins and stronger pricing power. LITE expects gross margins to exceed 40%, with an operating profit margin target of over 20%.

In addition, Nomura pointed out that strong AI infrastructure demand from global hyperscale AI and cloud service providers will continue to support the sustained growth of Chinese optical transceiver manufacturers.

LITE's Impressive Performance: Chip Shortage Drives Expansion Wave

Lumentum delivered an impressive report card. In 4QFY25, revenue reached $480.7 million, a year-on-year increase of 55.9%, and GAAP net profit turned from a loss of $252.5 million in the same period last year to a profit of $213.3 million.

More noteworthy is its forward guidance: 1QFY26E revenue is expected to be between $510 million and $540 million, a quarter-on-quarter growth of 6%-12%, and a year-on-year growth of 51%-60%. Management expects quarterly revenue to exceed $600 million by the June quarter of 2026 or earlier.

The EML chip supply bottleneck highlights industry opportunities:

• EML chip shipments reached a record high in the June quarter, with revenue nearly doubling compared to the same period last year
• To alleviate the chip shortage, LITE is transitioning from 3-inch wafers to 4-inch, with a potential upgrade to 6-inch in the future
• The company has secured large orders for 200G EML chips, which will be delivered in the December quarter
• 2026 is expected to be a breakthrough year for 100G and 200G laser chip shipments

COHR's Steady Growth: Data Center Business as Growth Engine

Although Coherent's overall performance is relatively moderate, the data center segment shows strong momentum. In 4QFY25, revenue grew by 16.4% year-on-year, with non-GAAP earnings of $192 million, a significant increase of 73.6% year-on-year.

The data center communication business performed outstandingly:

• Data center and communication business contributed 62% of total revenue, a year-on-year increase of 39% to $942 million
• 1.6T transceivers began shipping in the June quarter, with meaningful revenue contributions expected in FY26
• The company continues to develop 3.2T transceiver products, using EML chips with 400G per channel

However, the 1QFY26 revenue guidance of $1.46 billion to $1.60 billion (an 8%-18.6% year-on-year increase) fell short of market expectations, mainly due to the drag from the industrial business