Serenity: It is expected that the prices of upstream materials for AI optical interconnects will continue to rise.

BlockBeats News, July 6 – Serenity stated that the latest research report from Nomura Securities indicates that as AI infrastructure construction continues to heat up, the upstream photonic material supply chain is facing dual pressures of surging demand and tightening supply. AXTI and IQE are among the main beneficiaries of the indium phosphide (InP) supply chain. In terms of prices, the price of 2-inch InP substrates is expected to rise by 42% to 76%, while 3-inch InP substrates are expected to increase by about 78%; the price of 2-inch EML epitaxial wafers is expected to rise by 50% to 75%, and the price of 3-inch CW epitaxial wafers will also increase by more than 40%.

The report believes that the continuous expansion of AI data centers by hyperscale cloud service providers is pushing the entire optical communication supply chain into a phase of tight supply and demand. From material prices and end-user demand to supply capacity, bottlenecks have emerged across all links.

Serenity stated that as the demand for AI optical interconnects continues to be released over the next few years, upstream photonic material prices will continue to rise, similar to the price increase cycle previously experienced by the flash memory industry. In the next two years, as the AI demand curve further rises, whether this judgment is accurate remains to be verified by the market.