bottleneckScore 80/100Add to thesis
Coherent: InP capacity is the primary constraint; 6-inch ramp doubles capacity YoY with data center growth >80% to follow
“Indium Phosphide capacity continues to be our primary constraint... we are on track to double our internal Indium Phosphide output capacity year over year by the end of the current quarter, 1 quarter ahead of our original plan... we produced about 80% more Indium Phosphide lasers in our June quarter than we did the prior year.”
Why it matters
First-party confirmation that laser wafer capacity, not assembly or demand, is the gating factor for optical transceiver revenue growth into AI data centers, with concrete capacity doubling timelines through calendar 2027.
Investment implication
Supports COHR thesis of revenue acceleration ($3B quarter by end FY27) and margin expansion via 6-inch cost structure; also implies tightness in external EML supply, potentially benefiting merchant InP laser suppliers like Lumentum and Fabrinet's transceiver assembly partners.