Upstream — Pump Lasers and Core Components
The 980nm pump laser is the heart of an EDFA, similar to the laser in an optical module. It is injected into the gain fiber to excite photons, generate gain, and amplify weak signals for long-distance transmission. This segment is highly concentrated: Coherent's (COHR) pump lasers are mainly for in-house use and not for external sale, while Lumentum (LITE) is the primary external supplier.
Another core component is the Tunable ITLA (Integrated Tunable Laser Assembly), a key part of coherent optical modules, where Lumentum is a global leader.
Midstream — EDFA Components and Coherent Optical Modules
Lumentum sells pump lasers to companies like Accelink, D&O, and O-Net, which then manufacture EDFA components. D&O and Accelink are also major suppliers of coherent optical modules.
BOM structure of an 800G coherent optical module: transceiver section ~30%, DSP chip ~20%, the remaining 50% is passive components, structural parts, and labor. Compared to data center modules, coherent modules have extremely high and non-negotiable requirements for DSP algorithms.
Downstream — System Equipment Vendors
Nokia (gained local North American status after acquiring Infinera), Ciena, Cisco. In the Google project, Nokia secured the major share, Ciena got about one-third, and Cisco took the remainder. The core reason for Ciena's limited share is not a technical gap but that its production capacity is already saturated.
$Lumentum(LITE.US)
$Tradr 2X Long Lite Daily ETF(LITX.US)
$Ciena(CIEN.US)
Finally, finally: My advantage/talent: Being a content porter hahaha
Started investing last year, not that talented in all industries.
Constantly feeling things out, for now just skimming the surface / taking a cursory look.
But among excellent people: those with depth and deep thinking,
There is a talent advantage 🧏🏻♀️, so don't doubt other original content you see.
It's just the strength of other researchers.
I'm just gathering what interests me,
From various corresponding excellent researchers,
Sifting through to find the piece I like.
Experienced many things that made me think dealing with people is tiring, felt numb,
But all kinds of expressions, empathy.
🦁 The lion leads, growing towards the sun.
Idealist / Long-termist.
Always believe good things will happen.
While everyone is focusing on GPUs and optical modules, DCI (Data Center Interconnect) is becoming one of the fastest-growing and most certain tracks in AI infrastructure.
After the explosion in demand for logical AI computing power, data centers at the east and west ends of a city are no longer operating independently—they need to integrate computing resources for token processing. To use an analogy, it's like independent restaurants that used to operate separately are now becoming a central kitchen distribution system, requiring high-speed interconnection between data centers.
This interconnection is what the DCI backbone transmission system does. It brings incremental growth at several levels:
First, the DCI system equipment itself—including the mainframe chassis, optical amplifier plug-in boards, data aggregation and distribution boards, WSS, optical switches, and a series of other components. Note that this does not include switches; it is a transmission system independent of the internal data center network.
Second, coherent optical modules—this is the component with the highest value share in DCI equipment. Key data: The cost share of optical modules in DCI systems has surged from 30-40% in the first half of 2025 to 60-70%. The reason is that, driven by AI, new DCI systems tend to fill all module slots and maintain additional inventory.
Third, EDFA (Erbium-Doped Fiber Amplifier) and upstream pump chips—EDFAs are in severe shortage. The quantity of EDFAs required for delivery by Ciena and Nokia has doubled, with monthly demand increasing from 10,000 units to 15,000-20,000 units.
DCI has formed a telecom-side industry chain parallel to the internal data center optical modules (sold by InnoLight and Eoptolink to NVIDIA and Google). I divide it into three layers:
$TACLINK(688205.SH)$OPTOWIDE(688195.SH)
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