Intelligence Weekly: An Overview Of The Optics Value Chain

This report details the optics value chain, essential for scaling AI infrastructure beyond the limitations of copper networking. UBS analyzes key incumbents across materials, laser components, and transceiver assembly, favoring a balanced investment approach.

Key Takeaways

• 1.Networking, and specifically optics, is increasingly central to AI system performance and economics due to compute capacity bottlenecks.
• 2.The optics value chain consists of specialized materials, laser components, and transceiver assembly; near-term positioning favors a balanced approach due to elevated valuations.
• 3.Optics is transitioning from pluggables toward near-packaged optics (NPO) and co-packaged optics (CPO) to manage bandwidth scaling challenges.

Table of Contents

• Thoughts of the Week
• AI selection list
• The basics from copper to optics adoption
• Breaking down the process flow of packaged optics
• Tier 1 – The enabling materials and equipment
• Aixtron – the picks-and-shovels in the laser production value chain
• Soitec – the wafer monopoly with growth photonics exposure relative to group
• Tier 2 – Lasers, components, and modules
• Tier 3 – The PIC integrated device manufacturers, CPO foundry, and anxilliary
• Marvell – the connectivity silicon layer in AI optics
• Knowing your optics
• Risk table
• Appendix

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