AOI laser manufacturing bottleneck: CPO demand 8-10x current capacity by 2027-2028; 21-24 month lead times for equipment limit competitor entry.
“to mean the demand for the CPU market the operation market need to be 8 to 10 times bigger compared to today... for laser from today if I order the equipment it will take minimum minima 21 months to 24 months start to manufacture in high volume... So I think it's yes there will be some new supply in China... but for 300 million watt laser especially DWB and spec uh we don't see that not in the next two three years”
Why it matters
CPO (co-packaged optics) is becoming critical for next-gen hyperscale AI infrastructure. AOI's vertical integration in high-power laser manufacturing (6-7 years of R&D) and exclusive capability to produce 300mW DWDM lasers creates a structural bottleneck that competitors cannot replicate in under 2-3 years due to semiconductor process lead times. This is a hard constraint on industry CPO deployment velocity.
Investment implication
Investors should monitor AOI's laser fab expansion (Houston, 300% capacity increase by Q3 2027) as a critical choke point for hyperscaler CPO adoption. Chinese competitors cannot close this gap before 2028-2029. Equipment suppliers (laser fab capital equipment vendors) and substrate suppliers (indium phosphide) will see sustained demand acceleration. Hyperscalers dependent on CPO (likely Meta, Google, Microsoft) may need to negotiate directly with AOI or face deployment delays.