TLDR;
This video discusses the shift from copper cables to silicon photonics in AI data centres due to the limitations of copper at higher data rates. It highlights the power efficiency and necessity of silicon photonics for future AI infrastructure. The video identifies key companies across different layers of the silicon photonics supply chain, including base layer companies like Nvidia, Broadcom, Cisco, and Intel; middle layer foundries and contract manufacturers like Taiwan Semiconductor, Tower Semiconductor, Global Foundries, and Fabernet; and top layer pure-play photonics companies like Coherent, Lamentum, and Marvell Technology.
- Copper cables are reaching their physical limits in handling the data transfer demands of AI data centres.
- Silicon photonics offers a more power-efficient and scalable solution for high-speed data transfer.
- Key players across the supply chain are positioning themselves to capitalise on the growth of the silicon photonics market.
Intro [0:00]
The video introduces the significant investments made by Nvidia and Marvell into silicon photonics companies, signalling a fundamental shift in AI data centre infrastructure. The current method of data transfer in AI data centres, which relies on copper cables, is becoming inadequate due to limitations in speed and power consumption. Silicon photonics offers a solution by using light to transmit data through tiny glass pathways on silicon chips.
Obvious Company [3:24]
Nvidia is heavily invested in silicon photonics, integrating it directly into their rack-scale AI supercomputers. Their latest platform, Vera Rubin, uses Spectrum 6 Ethernet switches with integrated silicon photonics, resulting in five times better power efficiency compared to traditional networks. The Super Nix runs at 1.6 terabits per second per GPU, a speed at which copper cables struggle. Nvidia's adoption of silicon photonics is expected to drive its adoption throughout the supply chain.
#2 [4:41]
Broadcom is identified as the current industry leader in co-packaged optics, integrating optical components directly onto networking chips. They are currently on their third generation of this technology, running at 200 gigabits per lane, with a fourth generation already in development. Silicon photonics is a growing segment of Broadcom's business, poised to become more significant as data centres transition to optical connections.
#3 [5:17]
Cisco, known for enterprise networking, is also involved in silicon photonics through its acquisition of Luxterra in 2019. Cisco is developing its own photonics integrated circuits and digital signal processors in-house. They are producing 800-gigabit silicon photonic transceivers and have demonstrated a co-packaged optics prototype in a 25 terabit per second switch. While silicon photonics may not be the primary reason to invest in Cisco today, it is crucial for the company's future relevance.
#4 [7:47]
Intel is presented as a potentially controversial but significant player in silicon photonics. Intel has been researching silicon photonics for over 25 years and has shipped more than 8 million photonic integrated circuits. Their optical compute interconnect chiplet (OCI) achieves 4 terabits per second bi-directionally with a 3x power efficiency advantage over traditional modules. Intel is the only foundry offering an optics-based foundry option, allowing customers to integrate photonics directly into their chip designs.
#5 [9:09]
The video transitions to the middle layer, focusing on foundries and contract manufacturers that enable the physical production of silicon photonics. Taiwan Semiconductor (TSMC), the world's largest foundry, is establishing a dedicated platform for mass-producing photonic components in 2026, signalling the technology's growing importance. Companies already established in this space have a competitive advantage due to the compounding nature of head starts in semiconductor manufacturing.
#6 [9:39]
Tower Semiconductor is highlighted as a specialty foundry that manufactures photonic integrated circuits for other companies. They operate multiple photonics platforms, including one with lasers built directly onto the silicon. Tower Semiconductor's CEO stated that they are the leading foundry in silicon photonics. Their revenue from this segment more than doubled in 2025, and they are expanding capacity with customer prepayments.
#7 [10:34]
Global Foundries is presented as a scale player in contract chip manufacturing, combining silicon photonics fabrication with advanced packaging. They can build both the optical chip and the complete module under one roof. Global Foundries doubled its photonics revenue in 2025 and expects to nearly double it again in 2026, aiming for a $1 billion run rate by 2028.
#8 [11:29]
Fabernet is a precision contract manufacturer based in Thailand that specialises in building laser modules, transceivers, and optical engines at scale. They benefit from increased manufacturing orders without bearing the technology risk. Both companies that received $2 billion each from Nvidia manufacture through Fabernet.
#9 [12:48]
Coherent is identified as the world's largest vertically integrated photonics company, manufacturing laser chips, optical engines, and transceiver modules under one roof. They are one of only two companies making both indium phosphide and silicon photonic engines at scale. Nvidia announced a $2 billion strategic investment with a multi-year purchase commitment with Coherent.
#9 [13:36]
Lamentum manufactures the lasers that power the entire photonics ecosystem. Their lasers are used in other companies' products, including their competitors. Nvidia also announced a $2 billion deal with Lamentum, representing the largest laser commitment in the company's history.
#10 [14:27]
Marvell Technology's digital signal processing chips are used in virtually every 800-gigabit transceiver on the market. They also design custom AI chips for Amazon and Google. In February 2026, Marvell acquired Celestial AI, a company developing optical chiplets that connect computing chips using light.
Investment Breakout Educational [15:56]
The video concludes by summarising the key players across the different layers of the silicon photonics market. It reiterates that copper is reaching its physical limits and that silicon photonics is becoming the next foundation layer of AI infrastructure. The video emphasises the importance of identifying which companies will capture the most value as this transition accelerates.
