Lumentum Earnings Confirm Persistent Optical Chip Shortage, Chinese Suppliers Welcome Structural Opportunities

According to TechFlow Research, a Nomura Securities report on August 12 noted that Lumentum's revenue for the June quarter increased 109% year-over-year to $1.01 billion, with component revenue growing 103% to $649 million. Narrow linewidth laser shipments grew by over 130%, pump lasers increased 80% and are expected to grow another fourfold in the coming quarters; the company holds a 70% to 80% market share in the pump laser sector. 200G EML accounts for over 25% and is expected to exceed 50% by mid-2027. OCS shipments doubled, with management guiding for triple-digit year-over-year growth in 1QFY27, progressing towards a $400 million OCS revenue target in 2H26. The supply-demand imbalance for EML and CW lasers will not ease at least from FY26 to FY27. The report judges that the technology upgrade path is clear; NPO is expected to be commercialized between late 2027 and 2028, significantly expanding the optical TAM. The global shortage of optical chips creates structural opportunities for Chinese manufacturers: Yuanjie Semiconductor is expected to gain global market share in optical chips, with Nomura giving a Neutral rating and a target price of 1,375 yuan (based on 21x 2027 expected EPS); Zhongji Innolight and Tfc Communication both receive Buy ratings, benefiting from the 800G to 1.6T upgrade, increased silicon photonics penetration, and NPO incremental opportunities.