Is Indium Phosphide the Semiconductor of the Future?

Examining Lumentum in the context of other key players competing in the high-growth optical interconnect market.

After decades as a niche material, indium phosphide (InP) has emerged as a critical semiconductor for AI datacenter growth, driven by surging demand for high-speed optical interconnect. With mobile phone markets saturated and GaAs RFICs maturing, in contrast to GaAs, InP represents a III-V opportunity, particularly electro-absorption modulation lasers (EMLs), which command premium prices and have attracted major investment. Lumentum, bolstered by a $2 billion Nvidia investment and the purchase of a Qorvo fab, is well-positioning to capitalize on the shift from copper to optical solutions in datacenters. This report examines Lumentum in the context of other key players competing in the high-growth optical interconnect market.