Lumentum (LITE) UBS Global Technology and AI Conference summary

Market and customer expansion

• Acquisition of Cloud Light aimed to capitalize on AI and machine learning infrastructure growth, with a focus on diversifying and expanding the customer base beyond a single large client.

• Secured design wins with two additional large customers, with production ramps expected in the first half and throughout 2025.

• Market growth estimated at 40% CAGR, supporting multiple players in both the U.S. and China.

• EML chip business benefits from supplying both internal and external transceiver manufacturers.

• Next-tier hyperscalers and Chinese data center builders present further growth opportunities.

Technology and product roadmap

• EML (Electro-absorption Modulated Laser) capacity is being expanded by 40% from June 2024 to June 2025, with further increases planned via larger wafer sizes.

• Transition from silicon photonics to EML-based transceivers is driven by customer preference, speed, and cost, with a mix expected in the future.

• EMLs are favored for multi-wavelength designs (e.g., FR4/FR8), and next-gen 200G/400G/1.6T EMLs are in development.

• Over 50% of Cloud Light’s business is at 800G, with a shift toward more 800G and 1.6T expected in the coming year.

• 1.6T transceivers are being sampled, with production targeted for late fiscal 2025 or early fiscal 2026.

Manufacturing and capacity investments

• Major expansion underway at the Thailand facility, including a new three-story building and additional clean room space, to support transceiver and EML production.

• Infrastructure is sufficient through 2025, with test and assembly capacity scaled as customer commitments are secured.

• Dual manufacturing in China and Thailand maintained to ensure supply continuity, with plans to shift more production to Thailand as volume ramps.

• CapEx of $200 million allocated to support business growth and capacity expansion.