Photonics: demand exceeds supply until mid-2027
First it was GPUs. Then memory. Now it’s PHOTONICS and demand exceeds supply until mid-2027.
Every AI rack is a chain: compute memory → the optics that move the data between them. As copper hits its physical wall at 1.6T, the bottleneck moves to light. And the light layer just went scarce.
The 6-inch indium phosphide waferthe foundation every optical laser is built onhas gone from ~$1,400 to ~$5,000 since China imposed export licensing in February 2025. A ~250% move. Effective global capacity is roughly 600750K wafers against 2.6–3.0M of demand. A supply gap north of 70%, with 90%+ of production held by three names: Sumitomo, AXT, and JX Nippon.
This is no longer a thesis. It’s a Reuters headline: $COHR CEO flew to China with a U.S. delegation to raise the export-license delays in person. When a CEO gets on the plane, the constraint is real.
Here’s the layered map of who supplies the light, why each layer matters, and what four management teams just told us about the next 18 months.
