Steve Schiets ⭕️

Holodecks are coming end of the year.

Photonics need a consolidation phase before next upside cycle. This phase might be buying opportunity whoever missed earlier 🤞 $AAOI $LITE $COHR $POET $LWLG

I got asked about $TSEM competition so here’s the landscape. There are really 3 serious silicon photonics foundries today: $TSEM, $GFS, and $STM but they play very different roles. $TSEM runs the largest open foundry ecosystem. Companies like InnoLight, OpenLight, $COHR and others design photonics chips => Tower manufactures them. That’s why PH18 has real production volume and the broadest partner base today. $GFS is the main long-term challenger with GF Fotonix, integrating photonics and electronics on the same chip. Technically interesting, but still behind Tower in production scale. $STM is mostly a captive platform tied to AWS, not an open ecosystem competing for the same customers. So the landscape looks like this: $TSEM = ecosystem leader $GFS = long-term challenger $STM = AWS-driven platform And in photonics => ecosystems usually win.

$LWLG just signed a deal with Tower Semiconductor ($TSEM). Up 15% on the day. 20% after hours. Here's why most people are still underestimating this: LWLG isn't just a hardware company. They're a Material + IP Royalty Licensing business like Qualcomm, but for photonics. Every modulator built on Tower's PH18 platform using LWLG's polymer = royalty fees. At scale, they're targeting 60%+ gross margins. The TAM they're going after: • AI Datacenters: $10B • General Datacenters: $7B • Telecom: $7B • $24B total by 2028 And Tower ($TSEM) was already shown in LWLG's own investor deck as a target silicon photonics foundry partner. This isn't random. This was the plan. They currently have 3 customers in Stage 3 (prototype → production) and 15+ in earlier stages. The Tower deal just turbocharged that pipeline. Imagine a flashlight turning on and off 100 billion times per second. That's what $LWLG's Perkinamine® polymer enables. AI needs it.

$LWLG is not scam ?

I'm long $TSEM, the $TSM of photonics. My top two picks for CPO are $SOI and Tower Semi. Given the $NVDA GTC catalyst on new photonic related architecture next week: I expect Tower Semi to get a huge catalyst. Nvidia laready directly collaborated with Tower to scale 1.6T silicon photonics last month (hint hint for GTC), likely pushing the downstream players to use it. And now, Tower is the leading supplier of 1.6T SiPh PICs and the primary foundry for scale-up CPO architectures. (the other being global foundries) From my forward est: 2028 Forward P/E: ~16.8x to ~18.1x (Tower set a target $2.84B revenue by 2028, with ~31.7% operating margin, ~$750M in net profit) The thing to note is over 70% of their planned SiPh capacity is already reserved through 2028. And photonics haven't even ramped up yet. So, I expect them to strongly beat earning projections due to extreme photonics scaling + allocations price hikes that's not modeled into projections. Also, $TSEM is heavily de-risked by 70% of capacity already being reserved. MC is likely due to $TSEM being a very obscure upstream player in the photonics supply chain. But I expect the $NVDA GTC conference to be that catalyst that brings it to premium valuations. I'm long $TSEM as an asymmetrical upside for upstream photonics foundry layer.