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    3. Serenity Confirms CW Laser Supply Bottleneck, High Barriers for First-Generation CPO Lasers

    Serenity Confirms CW Laser Supply Bottleneck, High Barriers for First-Generation CPO Lasers

    By: rootdata|2026/08/12 08:03:46
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    On August 12, Serenity stated that the financial reports from several optical communication companies validated its assessment of the supply bottleneck for Continuous Wave (CW) DFB lasers. Lumentum (LITE) noted that the demand for ultra-high power CW lasers exceeded expectations, leading to a supply-demand imbalance. The company has the ability to raise the average selling price of lasers and confirmed that the expansion of CPO production is progressing as planned, with shipments expected to begin in the second half of 2027. They dismissed rumors of delays in expansion as "noise."

    Applied Optoelectronics (AAOI) reported strong demand for optical transceivers, stating that current CW laser production capacity is insufficient. Lasers are one of the bottlenecks in the 20% to 40% supply-demand gap for optical transceivers, with customers requesting increased supply and faster delivery weekly. AAOI is currently not involved in the deployment of the first-generation CPO. Serenity also mentioned that MACOM (MTSI) is focused on NPO, and MTSI indicated that the overall supply of indium phosphide DFB lasers is tight, with customers urgently needing supplies.

    In terms of competitive landscape, Serenity cited management from AAOI and Lumentum stating that Chinese manufacturers are significantly lagging in the CPO laser field. AAOI believes they are about 2 to 3 years behind, while Lumentum stated that they have not yet seen Chinese manufacturers achieve the qualified capacity and output levels they publicly claim. Serenity believes that there are still high entry barriers for first-generation CPO-related lasers, and the market has not seen the large influx of supply that some short-sellers have suggested.

    Serenity pointed out that its assessment of the CW laser supply bottleneck and the limited number of first-generation CPO laser suppliers has been validated by recent financial reports. They specifically mentioned that Sivers Semiconductors (SIVE), with a market capitalization of about $1.5 billion, is still relatively small compared to CPO-related companies like Coherent, Lumentum, and Broadcom, and they look forward to the business turning point brought by the transition to the next-generation optical communication architecture.

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