customerScore 60/100Watch
Coherent backlog reaches record levels with orders extending into calendar 2028; LTAs feature customer-funded capex and minimum demand commitments
Jim Anderson· Coherent Corp· AI· 2026-05-06· about Coherent Corp (COHR)
“Customer demand remains exceptionally strong with no signs of attenuation, and our visibility continues to extend further into the future with orders now reaching into calendar 2028 and customer LTAs extending to the end of the decade... These LTAs usually have three parts. First, there is usually an upfront investment from the customer to help with CapEx—this can come in a number of forms and represents customer skin in the game, which we view as very positive. Second, there is a supply commitment from us. Third, there is some sort of minimum demand commitment from the customer to ensure that capacity is utilized.”
Why it matters
Coherent's backlog visibility extending 18+ months into the future, combined with customer-funded capex structures, provides unprecedented demand certainty. The LTA structure transfers capex risk to hyperscaler/systems customers, reducing Coherent's balance sheet burden.
Investment implication
Hyperscaler capex budgets are increasingly flowing to photonics infrastructure via these LTAs. This signals that optical networking (transceivers, OCS, CPO) has moved from optional to mandatory in AI data center build-outs. Competitors without similar LTA visibility face demand uncertainty.