Optical Interconnect & DCI

Nvidia has committed at least $6.5 billion to photonics companies over the three months prior to May 2026, including $500 million to Corning for advanced optical connectivity solutions and $2 billion each to Lumentum, Coherent and Marvell, according to CNBC. The impact has been significant, with Marvell shares gaining 183.4% year to date, while Lumentum, Corning and Coherent have advanced 142.5%, 68.8% and 60.3%, respectively. Goldman Sachs projects the total addressable market for optical networking to grow from roughly $15 billion in 2026 to about $154 billion by 2028, a more than ninefold increase. Adoption of co-packaged optics is expected to accelerate starting in 2027, reaching roughly 20% to 30% penetration by 2028, while Mordor Intelligence estimates the global photonics market will reach $1.46 trillion by the end of 2026. Investors seeking diversified exposure can consider the Roundhill Photonics & Optics ETF LYTE, with $254.2 million in assets under management across 19 holdings; the KraneShares Photonic and Optical ETF LUMA, with $9.76 million in net assets; and the Tema Photonics & Optical ETF LAZR, with $94 million in net assets across 27 companies.

Amphenol's IT datacom business, which represented 43% of the company's total sales in the second quarter of 2026, saw revenues surge 89% year over year and 63% organically, with management saying the AI revenue run rate has reached roughly $10.5-$11 billion. Management noted that virtually all of the 22% sequential IT datacom growth in the quarter came from AI-related products, as customers require more copper, optics and power for larger, more complex AI clusters. The company's acquisition of CommScope contributed more than $1.2 billion in sales in the quarter, with CommScope's IT datacom business nearly doubling year over year; management expects that market to account for just under half of CommScope's 2026 sales, compared with roughly one-third in 2025. Amphenol faces tough competition from TE Connectivity, whose Digital Data Networks sales rose 34% year over year in the third quarter of fiscal 2026 with bookings up more than 70% year to date, and from Marvell Technology, whose data-center revenues increased 46% year over year to $2.17 billion in the second quarter of fiscal 2027. Amphenol shares have risen 16% year to date, trailing the broader Zacks Computer and Technology sector's 17% gain, and trade at a forward 12-month price/earnings of 25.32X versus the sector's 20.38X, while the Zacks Consensus Estimate for earnings stands at 72 cents per share, up 5 cents over the past 30 days and implying 53.19% growth.

Jim Cramer told Mad Money viewers to wait for Corning Incorporated to fall further before trimming or holding, citing the company's at-the-market selling program. Corning disclosed on September 11 that it had entered an agreement with Goldman Sachs to sell up to $2 billion of common stock through an at-the-market offering, with proceeds intended for general corporate purposes. The prospectus assumes raising the full $2 billion at $165.96 per share would require issuing 12,051,097 shares, increasing shares outstanding from 861,388,331 to 873,439,428. The offering came as Corning's optical business remained strong: at a September 9 Citi conference, CFO Ed Schlesinger said optical demand was very strong and orders continue to pick up, and second-quarter Optical Communications sales rose 32% year over year to $2.07 billion while core sales increased 17% to $4.74 billion. The bear case centers on execution, as Corning targets a $10 billion scale-up photonics business by the end of the decade tied largely to adoption of NPO and CPO technologies, and expects full-year 2026 capital expenditures of approximately $2 billion compared with $754 million spent in the first half of the year.

GlobalFoundries has signed a new multi-year agreement with Marvell Technology to increase production capacity for its silicon germanium technology. Under the deal, GlobalFoundries will expand SiGe production at its Burlington, Vermont facility to support Marvell's growing requirements, with the added capacity aimed at next-generation pluggable optical transceivers, Near-Packaged Optics and Co-packaged Optics. The collaboration is expected to serve rising demand for high-speed optical connectivity driven by artificial intelligence and cloud data center infrastructure. GlobalFoundries' existing solutions support 200G-per-lane optical connectivity, while its development roadmap targets higher-speed generations as bandwidth requirements rise. The company faces competition from United Microelectronics, which has begun mass production of photonic IC wafers, and Taiwan Semiconductor, which is strengthening its CoWoS packaging and silicon photonics capabilities.

United Microelectronics Corporation shares have soared 250.1% over the past year, far outpacing the industry's 25.8% gain, as improving foundry demand and AI exposure drive optimism. The company's 22/28-nanometer nodes contributed 37% of second-quarter revenues, with 22nm sales hitting another record, and management expects third-quarter wafer shipments to rise by a high single-digit percentage sequentially with capacity utilization exceeding 90%. UMC expects AI-related revenues to approach $300 million in 2026 and exceed $1 billion within three years, and it recently began mass-production delivery of silicon photonics wafers from its 12-inch Singapore facility, with plans to open its own 12-inch silicon photonics platform to broader customers in 2027. Its collaboration with Intel on a 12nm process platform is expected to begin production in Arizona in 2027. The 2026 earnings estimate now stands at $1.23 per share, up 75.7% over the past 60 days, and the stock carries a Zacks Rank #1 (Strong Buy).

MACOM Technology Solutions Holdings introduced a new 3.2T optical front-end chipset for AI and cloud data center interconnects and showcased it, alongside a broad portfolio of high-speed optical and connectivity components, at ECOC 2026 in Málaga, Spain. The launch underlines MACOM's push into 448 Gbps-per-lane and PCIe 6.0/7.0 ecosystems, aiming to become a core supplier for next-generation AI infrastructure and advanced telecom networks. The ECOC announcement closely echoes MACOM's OFC 2026 demonstrations, where it highlighted 3.2 Tbps optical transmit solutions and PCIe 6.0/7.0 technologies. MACOM's narrative projects $2.1 billion revenue and $605.5 million earnings by 2029, requiring 24.4% yearly revenue growth and about a $428.7 million earnings increase from $176.8 million today, while the most optimistic analysts already expected about US$2.7 billion in revenue and US$871.2 million in earnings by 2029. The company's forecasts yield a $398.36 fair value, a 51% upside to its current price.

Marvell Technology announced new collaborations with GlobalFoundries, Microsoft and Utimaco focused on advanced connectivity and payment security. The GlobalFoundries partnership targets expanded production of advanced SiGe chips used in next generation optical links for AI data centers, giving Marvell more assured capacity for SiGe chips used in pluggable optics, NPO and CPO and tightening a manufacturing relationship that already spans more than a decade. Marvell is also working with Microsoft and Utimaco to provide a cloud native payment security platform delivered through Microsoft Azure, combining LiquidSecurity hardware with Utimaco software to shift part of its security hardware footprint into a cloud delivered, usage based service. The first checkpoint for that effort is the Azure Payment HSM v2 public preview, which begins on 17 September 2026 in Western U.S. and Western Europe. Investors can then watch for disclosed customer adoption metrics, expansion of availability regions, and Marvell's capacity plans for higher speed SiGe optical products beyond the current 200G per lane benchmark.

Fujikura has sharply raised its full-year forecast for the fiscal year ending March 2027, more than doubling its operating profit projection from 211 billion yen to 432 billion yen. Net sales are expected to rise 48.4% to 1.755 trillion yen, ordinary profit to increase 127.1% to 453 billion yen, and net profit to grow 107.4% to 326 billion yen. The upgrade follows first-quarter operating profit for the fiscal year ending March 2027 of 104.8 billion yen, which exceeded half of the previous full year's 188.7 billion yen, with progress at the first-quarter mark standing at 24.3% for operating profit, 22.9% for net sales, and 24.7% for net profit, all on track with the plan. For the fiscal year ended March 2026, consolidated net sales rose 20.7% year on year to 1.1823 trillion yen, operating profit climbed 39.2% to 188.7 billion yen, and net profit jumped 72.5% to 157.1 billion yen, with the information and communications business generating 653 billion yen in net sales and 152.7 billion yen in operating profit on growing data center demand, accounting for more than 80% of consolidated operating profit. Forecast net profit per share is 196.88 yen, and the planned dividend is 38 yen per share.

MACOM Technology Solutions announced a front-end chipset solution for 3.2T applications designed to accelerate next-generation optical interconnects for artificial intelligence infrastructure. According to a company press release, the chipset delivers up to 3.2 terabits per second of throughput across eight channels operating at 448 gigabits per second PAM-4, a signal modulation technology used to increase data transmission speeds. The solution is engineered to support high-performance data processing across cloud data centers, high-speed networking, and next-generation AI infrastructure. Shares of the network chips maker jumped 4.4% in the afternoon session on the news, trading at $264.04, up 4.9% from the previous close. MACOM is up 50.9% since the beginning of the year, but at $264.04 per share it remains 35.5% below its 52-week high of $409.68 from May 2026.

Qualcomm has given Amazon an equity-linked incentive to deepen their AI-infrastructure partnership, with Amazon able to eventually purchase as much as $60 billion of Qualcomm data-center products while purchase-linked warrants could hand Amazon roughly $4 billion of Qualcomm shares at $161.26 each. Qualcomm shares gained approximately 2.1% to $188.64 Thursday, a level 7.37% above the stock's $175.69 GF Value. The warrant value represents roughly 6.7% of the maximum purchasing framework, directly tying Amazon's buying activity to Qualcomm's equity story. The two companies are also working together on custom AI inference silicon and optical connectivity capable of reaching 1.6 terabits per second. No minimum purchase commitment, delivery timetable or margin profile has been disclosed.

Generac struck a deal with Amazon to supply backup power generators for its data centers, with initial deliveries expected to total $2.4 billion between 2027 and 2028, and also granted Amazon the right to buy up to $340 million worth of its stock. Generac shares soared 19% on the news, while Amazon's stock moved 1.3% higher. Fluence Energy shares tumbled 14% after the battery storage maker cut its full-year guidance, now expecting $2.4 billion in revenue for 2026 versus its prior guidance of $2.9 billion to $3.1 billion, and anticipating a loss of $200 million before interest, taxes, depreciation and amortization, more than its previous guidance range of $30 million loss to $10 million EBITDA. Workday rose 5% after CNBC's David Faber reported that efforts to gain financing for a bid to take the cloud-based human resources software platform private are continuing, citing unidentified sources. Tower Semiconductor rose almost 9% after agreeing with privately-held New Photonics to a high-volume shipment of laser-integrated optical engines designed to meet growing demand for high-bandwidth, energy-efficient optical interconnects in AI infrastructure, and Vital Farms climbed 9% after Axios said the Austin, Texas-based pasture-raised egg and butter producer is exploring strategic alternatives, including privatization.

AFL, Corning Incorporated, Sumitomo Electric Industries, Ltd., and TeraHop PTE. LTD. announced the completion of the SDM4 Multicore Fiber Multi-Source Agreement and the public release of the SDM4 Multicore Fiber MSA Technical Specifications, Version 1.0. The specification defines common geometrical, optical, mechanical and measurement requirements for a four-core multicore fiber intended for AI data centers, campus networks and other short-reach optical links, completing the objective the MSA set out to achieve: an industry-defined technical foundation for multi-vendor interoperability and future international standardization of four-core multicore fiber. Key elements include a four-core, square-lattice 2x2 core arrangement with a core pitch of 40 plus or minus 1 micrometers, a nominal cladding diameter of 125 micrometers, optical characteristics suitable for O-band short-reach applications, and crosstalk limits of minus 40 dB or less at 1 km and 1310 nm for both adjacent and diagonal core pairs. Antonio Castano, Chair of the SDM4 MCF MSA, said the specification establishes a common technical foundation that can help accelerate adoption of multicore fiber across the industry by aligning around a shared four-core fiber design. The MSA said frequent revisions are not anticipated and that future evolution of requirements for this class of fiber is expected to be advanced through relevant international standards-development organizations, with the published specification serving as a technical reference for discussions within ITU-T, IEC and organizations such as IEEE.

Corning Incorporated is expanding its partner base across the technology, cloud, networking and telecom sectors, signing a series of multibillion-dollar agreements tied to AI infrastructure buildouts. In the first half of 2026, Corning entered a multiyear agreement worth up to $6 billion with Meta to supply optical fiber, cable and connectivity products for Meta's U.S. data-center expansion, and also signed a multibillion-dollar, multiyear agreement with Amazon to support its AI data center expansion. Corning has additionally formed a multiyear commercial and technology partnership with NVIDIA under which it plans to increase its U.S. optical-connectivity manufacturing capacity tenfold and expand U.S. fiber production by more than 50 percent. Verizon and Corning announced a multibillion-dollar, multiyear agreement covering more than 80 million miles of high-density optical fiber and connectivity solutions from 2027 through 2032, supporting both broadband expansion and the long-haul network needed to connect AI infrastructure. Beyond those large contracts, Corning is collaborating with US Conec as a licensee of the PRIZM TMT optical ferrule technology, designed to accommodate higher fiber counts in tighter spaces for denser AI data centers. Corning faces competition from Amphenol Corporation and Ciena Corporation, and its growth outlook remains dependent on the pace of AI infrastructure investment and the timing of large customer deployments.

Marvell Technology's data center business reached a record $2.17 billion in the second quarter of fiscal 2027, up 46% year over year and 18% sequentially, and accounted for 79% of total company revenues. The data center end market made up 74% of Marvell's fiscal 2026 revenues, and the company expects data center revenues to grow approximately 60% in fiscal 2027. Marvell reported strong demand for 800G optical DSPs while its 1.6T products ramp rapidly, and scale-out switching is expected to more than double in fiscal 2027 on broader adoption of its 51.2T switch products. The company expects its custom business to accelerate in the second half of fiscal 2027 and more than double year over year in fiscal 2028, driven by XPU and XPU-attach solutions, with an expanded hyperscaler agreement covering AI inference accelerators, storage controllers, network interface controllers, memory interface controllers and near-memory compute. Marvell also expanded its position in next-generation AI infrastructure through its relationship with NVIDIA, including NVLink Fusion, scale-up switching and silicon photonics, and introduced products such as the 102.4 Tbps Teralynx T100 switch. Marvell shares have gained 170.3% year to date, and the Zacks Consensus Estimate for fiscal 2027 earnings suggests year-over-year growth of 48%.

Ciena Corporation announced three-year financial targets at its Investor Forum at its R&D facility in Ottawa, Ontario, projecting a revenue compound annual growth rate of approximately 30% from 2026 through 2029, an adjusted gross margin of about 50%, an adjusted operating margin of 32-35% and a free cash flow margin of roughly 20%. Management said the targets reflect the opportunities Ciena sees ahead and its confidence in execution, supported by a differentiated portfolio, growing customer demand, expanded supply capacity and new addressable market opportunities. The long-term targets follow strong third-quarter fiscal 2026 results, when Ciena reported revenue of $1.67 billion, up 37% year over year, adjusted gross margin of 46.4%, a record adjusted operating margin of 22.5% and $116 million in free cash flow, while backlog increased by $800 million to $8.5 billion and management expects fiscal 2026 backlog to exceed $10 billion. Ciena has also secured long-term agreements for certain key components through 2029, and for fiscal 2027 management provided an early outlook for revenue growth of at least 30%, or $8.3-$8.4 billion, with adjusted gross margin of 45-46% and adjusted operating margin of 25-27%. Beginning with first-quarter fiscal 2027 results, Ciena will change its financial reporting structure to four segments: Optical Systems, Interconnects, Global Services and Routing and Other.

Yuanta Securities (Thailand) said in an analysis note after visiting the factory of Stars Microelectronics (Thailand), or SMT, that the recovery trend in its business has become clearer, with second-quarter 2026 results reflecting a rebound in revenue, capacity utilisation and margins, and it expects the third and fourth quarters of 2026 to improve significantly on the prior quarter. SMT currently has advance orders covering roughly 8 to 12 months of production and targets 2026 revenue of no less than 2.6 billion baht, while for 2027 it expects growth of more than 10%, or above 3 billion baht. Yuanta views current estimates as based on fairly conservative assumptions and sees upside if orders convert to revenue faster than expected, particularly in wafer dicing, where market supply is constrained. Yuanta sees the Optical business becoming SMT's new growth engine on the back of AI growth, since the Optical and OSAT segments benefit directly from AI infrastructure investment and carry higher margins than the traditional business. Revenue from SMT's AI-related customers is still at an early stage and accounts for less than 5% of total revenue, but has the chance to rise to at least 10% next year. Meanwhile, its collaboration with Lumentum, a major player in the global Optical supply chain, marks an important starting point covering joint investment and development work. Yuanta expects SMT revenue of 2.67 billion baht in 2026, rising to 3.11 billion baht in 2027, and forecasts normalised profit of 150 million baht in 2026, rising to 256 million baht in 2027, or growth of about 70% from the previous year. On 2027 valuation, the stock trades at a PER of about 19 times, still below peers trading at roughly 28 to 58 times. Yuanta maintains its Buy rating on SMT with a target price of 7.60 baht, based on a PER of 25 times, compared with the closing price on 15 September 2026 of 5.85 baht, implying upside of about 29.9%.

AXT Inc. shares climbed 11.49 percent on Wednesday to close at $64.30 after Needham & Company named the company one of five semiconductor beneficiaries in the accelerating co-packaged optics sector. Following a five-day visit to Semicon Taiwan 2026, Needham said co-packaged optics will play a huge role in debottlenecking artificial intelligence networks through 2028 and beyond, and that AXT's indium phosphide substrate sits at the center of that shift. Needham also named Coherent Corp. and Lumentum Holdings among the similar beneficiaries, signaling a more bullish view across the industry. The firm upgraded AXT to buy from hold last July with a $90 price target, which still implies 56 percent upside from Wednesday's close. Investors will watch for business updates next week when AXT participates in the Morgan Stanley ASIA Best Corporate Day on Monday and Tuesday, September 21 to 22, including any guidance on third-quarter financial performance and updated operational and financial guidance for the rest of the year. In the second quarter, AXT swung to a net income of $13.03 million from a $7.67 million net loss a year earlier, as total revenues more than doubled to $47.59 million from $17.97 million on record indium phosphide revenues. Hedge fund holders fell to 33 in the second quarter from 37 in the first, but their committed capital rose 34 percent to $487.9 million from $363.7 million quarter-on-quarter.

Fabrinet shares have dropped about 22.3% since its last earnings report, underperforming the S&P 500. The company reported fourth-quarter fiscal 2026 non-GAAP earnings of $4.10 per share, up 54.7% year over year and beating the Zacks Consensus Estimate by 6.49%, while revenues rose 44.6% to $1.316 billion, beating consensus by 2.64%. Data center revenues totaled $669 million, up 68% year over year and 13% sequentially, becoming the largest category at 51% of sales, with data center interconnect exiting the quarter at an annualized revenue run rate above $1 billion. For the first quarter of fiscal 2027, Fabrinet expects revenues of $1.375-$1.425 billion, implying 43% year-over-year growth at the midpoint, and non-GAAP earnings of $4.10-$4.25 per share. Management estimates Building 10 at the Chonburi campus, on track for completion by early 2027, can add $3-$3.5 billion of revenue capacity, taking total capacity to roughly $8.5-$9.3 billion, with a path to $12.5-$14 billion of annual revenue capacity over the coming years.

GlobalFoundries is broadening its growth prospects by expanding collaborations across emerging semiconductor applications, including AI, optical networking, power management, automotive, edge computing and quantum technologies. The company recently signed a long-term manufacturing agreement with Monolithic Power Systems, under which Monolithic will deploy its proprietary process technology at GlobalFoundries' advanced 300mm facility in Singapore to address automotive architectures, industrial robotics and automation, and smart power stages for AI and cloud infrastructure. In the second quarter, GlobalFoundries' communications infrastructure and data-center end market generated more than 60% year-over-year growth, driven by demand for optical networking across its silicon photonics and silicon germanium platforms. In September, the company finalized a definitive agreement with the U.S. Department of Commerce's CHIPS Research and Development Office for up to $375 million in R&D funding over five years. GlobalFoundries also announced a strategic collaboration with RAAAM Memory Technologies, whose Gain-Cell RAM memory can take up 40% less space on a chip and use up to 60% less power than traditional SRAM, with GlobalFoundries providing the FDX platform manufacturing technology. The financial impact of these collaborations depends on successful commercialization, customer adoption and production ramps.

Nokia Oyj is linked to Nscale's plan to raise about $3.5 billion in pre-IPO funding for AI infrastructure, a round expected to test Nokia's role as a supplier of AI infrastructure hardware and related services. Nokia is also a direct investor in Nscale, so the funding outcome could influence future AI infrastructure partnership terms. The planned raise effectively stress tests a key part of the Nokia narrative, which leans on AI and cloud orders in optical and IP networks as a catalyst for future earnings and margin expansion. The clearest marker to track is how management attributes any future AI-related optical and networking orders in its updates through 2027, and whether it explicitly links deal visibility or backlog to Nscale and similar AI infrastructure partners. Nokia sells mobile, fixed, and cloud network solutions across regions from North and Latin America to Asia and the Middle East, putting its AI infrastructure work with Nscale inside its broader communications hardware and services footprint.

Qualcomm shares rose 5% on Tuesday after StoneX analyst Cody Acree reiterated a Buy rating and $270 price target, pointing to the chipmaker's expansion into data-center silicon as a growth avenue beyond smartphones. The call follows Qualcomm's recent collaboration with Amazon on customized AI silicon and high-speed optical connectivity for data centers. Qualcomm expects its data-center business to generate about $5 billion in fiscal 2027 revenue and more than $15 billion by fiscal 2029, with total non-handset revenue projected at $40 billion by fiscal 2029 across automotive, IoT and other markets. The diversification push comes as Qualcomm's handset business faces pressure, with fiscal third-quarter handset revenue falling 20% year over year to $5.09 billion. Acree expects non-handset operations to become a larger contributor to Qualcomm's semiconductor business, shifting investor focus toward execution in newer markets.

KeyBanc has placed a $400 price target on Marvell Technology, implying roughly 83% upside from the stock's current $218.82 level, even as shares sit about 34% below their 52-week high of $329.80. The call stands well above the consensus 12-month target of $284.64, which itself implies about 30% upside. Marvell's decline has come alongside a sector-wide AI chip selloff, with Broadcom down 12.28% and NVIDIA down 6.31% over the past month, and the stock fell 7.32% in a single session after a Wall Street Journal report on September 14 said prominent AI leaders publicly called for a slower development pace. Fundamentals have kept moving the other way: Marvell reported record Q2 revenue of $2.739 billion, up 37% year-over-year, with data center revenue climbing 46% and now accounting for 79% of total revenue, up from 74% a year earlier. Management raised its fiscal 2027 outlook to roughly $12 billion and expects fiscal 2028 data center revenue to grow more than 60%, while KeyBanc's target rests on custom AI ASIC wins with Amazon and Google and a near-monopoly position in 800G and 1.6T PAM4 DSPs and optical interconnects. The October 6 Investor Day is the next catalyst analysts are watching.

Taiwan Semiconductor Manufacturing Company, or TSMC, reported consolidated net revenues for August 2026 of approximately NT$514.81 billion, up 10.1% from July 2026 and 53.3% from August 2025. Cumulative revenues for January through August 2026 reached NT$3,386.87 billion, a 39.3% increase over the same period in 2025, as the company continued to benefit from strong demand for its leading-edge process technologies. High-performance computing remained TSMC's largest platform, at 66% of second-quarter 2026 revenues with 20% sequential growth, while Internet of Things, Digital Consumer Electronics and Automotive revenues rose 4%, 5% and 15%, respectively, from the prior quarter. Advanced nodes of 7-nanometer and below accounted for 77% of second-quarter wafer revenues, with 2-nanometer contributing 3% and 3-nanometer, 5-nanometer and 7-nanometer accounting for 30%, 33% and 11%. Management pointed to robust AI-related demand from cloud service providers and emerging Agentic AI CPU demand, with work underway across x86, ARM-based and RISC-V architectures. Separately, GlobalFoundries signed a long-term manufacturing agreement with Monolithic Power Systems for its Singapore 300mm facility and finalized a $375 million R&D award with the U.S. Department of Commerce's CHIPS Research and Development Office, while Qualcomm entered a multi-generation collaboration with Amazon on customized AI data-center silicon and optical connectivity up to 1.6T.

Ciena Corporation has launched Ciena Ventures, a new corporate venture capital program with an initial $200 million commitment to invest in early-stage companies and technology-focused venture funds. The program will focus on four areas: networking infrastructure and operations, next-generation data centers, optical networking and interconnects, and adjacent technologies such as computing, materials and emerging communications. Ciena management expects its addressable market to reach $50 billion by 2029, expanding from traditional WAN into data-center connectivity, while fiscal third-quarter backlog rose to $8.5 billion and revenue guidance was raised to $6.42 billion. Fiscal 2027 revenue is expected to grow at least 30% to $8.3-$8.4 billion, with adjusted operating margin of 25-27%. The article also notes competitive pressure from Cisco Systems, whose networking product orders rose 40% year over year in its fiscal fourth quarter, and from Arista Networks, which expects AI revenue to reach at least $3.6 billion in 2026.

The global AI investment wave is driving foreign capital into Thailand's infrastructure sectors, including data centers, power systems, cooling systems, PCB and storage. Data from Kasikorn Thai shows that in the first half of 2026, Thailand received investment promotion applications totaling 1.47 trillion baht, up 37% from a year earlier, while foreign capital rose 80% to 1.36 trillion baht, led by the digital and electronics industries. Among the stocks seen as direct beneficiaries is DELTA, which makes power supply and cooling systems for data centers and is ramping up commercial production of liquid cooling systems. HANA is viewed as the Thai stock market's new AI proxy, with AI-related products set to enter production lines in the second half of 2026. KCE is expected to benefit from the semiconductor upcycle and tight PCB supply, which could support selling prices and profits in the second half of 2026. SMT gains from the shift to optical connectivity, while CCET benefits from rising demand for both HDD and SSD storage as AI computing generates massive volumes of data. INSET has seen a flood of project inquiries, while WHA and AMATA stand to gain because data center businesses use roughly 12 to 16 times more electricity and water than general industrial plants, meaning industrial estate revenue does not end on the day land is sold but continues through long-term utility income. If foreign capital flows and data center investment accelerate further in 2027, the Thai stock market may see an increasingly clear picture of an AI ecosystem.

Xiangshan Co. announced that it plans to issue shares and pay cash to Ningbo Genxi, Zhejiang Qintong, Zhiyan Xinhe, Wenzhou Qunhong, Ruisheng Intelligent, and Wang Ling to acquire 100% of Wuluo Smart, and to raise supporting funds, with the total consideration tentatively set at 800 million yuan. After the transaction, the company will add AI computing equipment business, forming a dual-engine business structure of auto parts plus AI computing power. Its shares will resume trading on September 15, 2026. On the same day, Focus Lightings Tech delivered its first CPO optical chip samples to an important customer, with the prototype delivery milestone met on schedule, marking the product's move from development to customer validation. Trading data shows institutional seats net bought Yihua Co. shares worth 199 million yuan, accounting for 12.29 percent of total turnover.

Gulf Development Public Company Limited, or GULF, has announced a major investment plan over the next five years worth as much as 140 billion baht to expand its data centre and digital infrastructure businesses and capture the growth of AI technology. The company aims to raise its data centre capacity to as much as 2,000 megawatts, up from roughly 200 megawatts at present. Chief Executive Officer Sarath Ratanavadi said the private sector is ready to take part in developing power projects of all types under the new Power Development Plan, or PDP, including solar, wind, battery energy storage and natural gas-fired power plants, as well as studying small modular reactor technology. The PDP targets power generation capacity of 50,000 megawatts, and the company sees opportunities in the free electricity business, such as selling green power to large electricity users. On the data centre side, GULF agrees with the government's move to set clear definitions and regulations, noting that demand in Thailand is very high from users of various social media platforms. The company has also joined hands with Singtel Group to take part in developing the Vietnam-Thailand-Singapore Cable System, a submarine cable network linking Vietnam, Thailand and Singapore on an open access basis, with a project value in the tens of billions of baht and service scheduled to begin in 2030.

Aehr Test Systems is diversifying beyond its traditional silicon carbide exposure, with nearly 95% of fiscal 2026 revenues now coming from markets outside EV-related SiC, compared with more than 95% of its business tied to SiC for electric vehicles two years ago. AI accelerators, CPUs and network processors accounted for about 71% of fiscal 2026 revenues, while optical device test and burn-in for data-center infrastructure transceivers, chip-to-chip I/O and hard disk drives represented another 20%. Momentum has continued into fiscal 2027, with AEHR securing a $22 million follow-on order for AI processor wafer-level burn-in systems in August, along with another follow-on production order for silicon photonics. Power semiconductors provide another leg to the growth story, as AEHR received roughly $8 million of new SiC wafer-level burn-in orders in July as EV programs picked up, and the company is expanding into gallium nitride applications while memory remains a longer-term opportunity spanning NAND and high-bandwidth memory. The company's $100.6 million effective backlog and $130-$150 million fiscal 2027 revenue outlook support near-term growth, though sustaining that pace will depend on continued ramps in AI and silicon photonics, a recovery in power semiconductor demand and successful expansion into new applications. Aehr competes with Teradyne and FormFactor in a highly competitive semiconductor test equipment market, and its shares have surged 152.6% over the past six months, trading at a forward 12-month price-to-sales multiple of 19.05X versus the industry's 5.72X, with the Zacks Consensus Estimate for fiscal 2027 earnings at 74 cents per share.

Analog Devices' Communications end market reached $655 million in fiscal third-quarter 2026, up 18% sequentially and 84% year over year, accounting for approximately 16% of ADI's total quarterly revenues. Data Center now represents 80% of ADI's Communications revenue, with sales growing more than 100% year over year in both optical and power, while wireless revenues rose more than 25% year over year on a cyclical recovery. The company expects optical circuit switching revenues to approximately double in fiscal 2026, with similar growth targeted for fiscal 2027, as networks move from 800 gigabits toward 3.2 terabits per second. The completed Empower Semiconductor acquisition adds integrated voltage regulation and high-density power technology, expanding ADI's content across the grid-to-chip architecture. ADI faces competition from Marvell Technology and Astera Labs in the AI connectivity space, and shares have gained 39.7% year to date, with the Zacks Consensus Estimate for fiscal 2026 earnings implying year-over-year growth of 66.4%.

National Telecom Public Company Limited, or NT, has signed a grant agreement with the United States Trade and Development Agency, or USTDA, to study the feasibility of the Thailand-US international submarine cable project, or THUS. The signing ceremony was presided over by Mr. Chaichanok Chidchob, Minister of Digital Economy and Society, at NT's headquarters. Colonel Sanpachai Huvanandana, President of NT, and Thomas R. Hardy, Deputy Director and Chief Operating Officer of USTDA, were the co-signatories. Under the agreement, USTDA will provide grant funding to NT to study the feasibility of the THUS submarine cable system, which aims to replace submarine cable systems connecting Thailand to the United States that are due to expire in the near future. The study results will be used to inform investment decisions on the new submarine cable system, covering budget, cable routing, and investment structure. The THUS submarine cable system is a trans-Pacific system connecting Thailand to the United States via five Southeast Asian countries: Indonesia, Malaysia, the Philippines, Singapore, and Vietnam. It aims to strengthen Thailand's position as a regional digital connectivity hub to the United States, while supporting rapidly growing inter-regional bandwidth demand driven by numerous data center investments in Thailand and the region. NT has selected APTelecom Limited Liability Company, or APTelecom, a US company with experience in telecommunications projects, to conduct the study and assess the project's feasibility across all dimensions.

Kiatnakin Phatra Securities Public Company Limited, or KKP, assesses that global AI investment is moving beyond chips into the surrounding infrastructure, which will create positive ripple effects for the Thai economy, especially the opportunity to attract a new wave of foreign direct investment, or FDI, into the country's industrial sector and advanced technology supply chain. The analysis notes that as AI systems grow larger, power per rack in data centers rises from several tens of kilowatts to about 600 kilowatts and could reach 1 megawatt in the future, shifting the main constraints to power delivery systems, cooling systems, and data transmission. KKP sees two key technologies that will drive the next phase: 800VDC technology and the shift to optical connectivity. KKP expects the new wave of FDI to flow into semiconductors, printed circuit boards, or PCBs, and advanced electronics, estimating that Thailand's major industrial estate developers, WHA and AMATA, will see land sales increase by about 2,500 rai per year and 2,000 rai per year, respectively. For the standout stocks that stand to benefit, KKP states that Delta Electronics (Thailand) Public Company Limited, or DELTA, is ready to serve demand for data center power systems and liquid cooling systems, while Hana Microelectronics Public Company Limited, or HANA, benefits from demand for analog ICs and power semiconductors. KCE Electronics Public Company Limited, or KCE, is ready to serve demand for high-end PCBs, and Stars Microelectronics (Thailand) Public Company Limited, or SMT, benefits directly from the shift to optical connectivity technology. Cal-Comp Electronics (Thailand) Public Company Limited, or CCET, has the potential to serve demand for both HDD and SSD storage devices. Beyond the electronics group, KKP states that AI's expansion also benefits energy infrastructure, as a global shortage of large power transformers bodes well for Thirai Public Company Limited, or TRT, while demand for transformer oil and fluids for liquid cooling systems opens opportunities for P.S.P. Specialties Public Company Limited, or PSP, as well as the strategic partnership of Millennium Group Corporation (Asia) Public Company Limited, or MGC, in developing humanoid robots. Supapong Iamkong-aek, an analyst at Kiatnakin Phatra Securities Public Company Limited, said global AI investment will not stop at software or chips but is spreading to areas where Thailand has good cost advantages, namely infrastructure and downstream industries, which is a window of opportunity that remains wide open for the Thai economy.

The Ministry of Industry and Information Technology released the 15th Five-Year Plan for the development of the information and communications industry, setting the goal of building a new-generation communications network by 2030, with cumulative investment in information infrastructure reaching 3.8 trillion yuan, and the target for intelligent computing power jumping from 1,590 exaflops to 9,800 exaflops. It also proposed launching 6G commercial use at an appropriate time and advancing 6G standard development and technical trials. Driven by this industry catalyst, the Shanghai Composite Index fell 1.18% in the previous trading session, while the communications sector rose 0.63% against the trend. The Southern Fund's Communications ETF saw a turnover rate of 6.93% and turnover of 24 million yuan, while the CSI Communications Services Index it tracks gained 0.63%. At the industry level, institutional data shows that the communications sector rose 73.59% in the first half of 2026, significantly outperforming the CSI 300. Shipments of 800G optical modules continued to expand, and 1.6T entered the early stage of large-scale deployment. Third-party institutions forecast that the global AI optical module market will reach 26 billion US dollars in 2026. In addition, on September 11, the US Federal Communications Commission finalized relevant rules, and several leading domestic optical module makers such as Zhongji Innolight and Eoptolink were not included for the time being, easing overseas policy concerns.

Eoptolink said in an institutional survey that, based on current customer demand guidance and orders, industry prosperity is expected to remain high, with 1.6T and 800G as the main products delivered this year. Shipments of 800G products have continued to rise and have become the main delivery product, and the company expects the pace of 1.6T optical module volume shipments to accelerate further in the second half of the year. The company also said the share of silicon photonics products continues to increase with strong growth momentum, which is expected to continue next year. For near-packaged optics products, relevant teams have been continuously following up on research and development and customer cooperation, with batch order delivery demand expected in 2027 and further scaling of shipments in 2028. In company news the same day, Zhipu AI announced it has completed about $5 billion in financing, including about $2 billion in share placement and about $3 billion in convertible bond issuance. The funds raised will mainly be used for the next-generation GLM foundation model, a fully self-trained system, and the computing power resources and technical infrastructure required for large-scale training and production inference. Zhongju Semiconductor's investee company Jingheng Xidao plans to sign an investment agreement with the Quzhou Intelligent Manufacturing New City Management Committee to invest about 1.1 billion yuan through a wholly owned subsidiary to build a project with annual output of 2,220 tons of high-purity quartz materials. The project will be built in two phases, with the first phase building a project with annual output of 720 tons of high-purity quartz materials and a total planned investment of about 333 million yuan. Hongqiao Holdings plans to acquire 100% equity of Yunnan Hongqiao New Energy and Yunnan Xinchuang in cash through its subsidiary Yunnan Hongqiao New Materials, with a total transaction price of about 2.05 billion yuan. Inspur Electronic Information intends to raise no more than 9 billion yuan through a private placement, and Hongchang Electronics intends to raise no more than 1.8 billion yuan through a private placement.