Serenity@aleabitoreddit
Warning: The entire AI industry will likely be bottlenecked by two companies:
1. $AXTI ($700M)
2. $SMTOY ($31.7B)
Which both control 60–70%+ of the world's InP substrates.
Future $NVDA, $GOOGL TPU v7 pods, $META, $MSFT, $AMZN hyperscaler clusters require InP-based lasers and receivers.
$AVGO, $LITE, $COHR use for EMLs for 800G/1.6T transceivers, DFB lasers, and other optical infra.
Without InP substrates, the supply chain falters.
After looking at TPU BOM to Maia BOM, it looks like future ASICs + GPUs + hyperscaler deployments are heavily reliant on photonics.
And two vendors could freeze the global InP substrate market covering nearly all of:
- Hyperscaler optics (TPU pods, etc)
- Optical transceivers (5g, data)
- LiDAR (robotaxis, drones, military)
-Optical Modules (interconnect clusters)
- Silicon photonics laser dies (Nvidia’s future co-packaged optics and Intel/Broadcom SiPh engines use InP CW laser arrays.)
Since these companies make up majority of the market supply:
-AXTI (est. ~30–35%)
-Sumitomo (est.~30%)
- JX Nippon (est. 10-15%)
That’s it. (eg. 2021 industry note from Yole states that "Sumitomo Electric + AXT together had “more than 75%” of the InP substrate market")
Hyperscalers/AI are moving toward photonics but the entire AI industry is fragile.
If either $AXTI or $SMTOY stop supplying materials, the entire future AI buidlout gets crippled. It's even crazier that a $700m company could become the the center of it all.
InP substrate will likely one of the biggest bottlenecks alongside HMB as the AI industry shifts to photonics.
