Trurnp Tarckre

We really timed the local bottom 😳😳😳😳😳

Lumentum vs Tower: Shifting conviction in photonics Over the past two quarters, $TSEM has gradually overtaken $LITE as our main photonics holding. We have now exited Lumentum entirely and redeployed the capital into Tower. Lumentum is being trimmed because it modestly lagged the portfolio despite the CPO rally. Structural pressures are building around CPO: high-power CW laser demand remains soft as the technology is not yet ready for volume deployment, traditional EML and CW laser share is shifting toward more aggressive Chinese suppliers, and the move toward silicon photonics structurally reduces indium phosphide content. While Lumentum retains the strongest laser technology and could continue to participate, the magnitude of upside now looks more modest as the name becomes better understood by the market. Tower, by contrast, sits at the actual bottleneck of CPO: high-yield hybrid bonding of photonic ICs to electronic ICs. While $TSM leads on the electronic side, it has historically struggled with the photonic integration and bonding steps — precisely Tower’s decades-long strength from high-yield CMOS image sensor to memory buffer bonding. As the industry confronts real CPO yield challenges, control of the hybrid-bonding step is becoming a decisive advantage. Tower also benefits from the silicon-photonics transition, which reduces heavy indium-phosphide consumption, and from displaced CPO players exiting foundries that lack hybrid-bonding capability. In addition, Tower is already space-qualified with proven radiation heritage, positioning it better for emerging space optics opportunities. Tower now carries our highest conviction in photonics, with multiple converging drivers across CPO and silicon photonics. It is the photonics name we see carrying the most upside into the late 2020s.