Semi Doped

Austin recaps moderating an agentic AI panel at Synopsys Converge, then gives an in-depth technical breakdown of Meta's MTIA custom silicon. Why they're building it, how chiplets let them ship a new chip every 6 months, and how the roadmap is shifting toward gen AI inference. Vik digs into Applied Optoelectronics (AAOI), the vertically integrated Texas laser shop whose stock went from $1.48 to $100+, and whether history is about to rhyme.                     

Austin Lyons: https://www.chipstrat.com
Vik Sekar: https://www.viksnewsletter.com/
                                                                                                                                  
Topics covered:
• Agentic AI in chip design — how it changes roles for junior and senior engineers
• Optical circuit switching and what it means for Arista's business model
• Meta's ad-serving pipeline: Andromeda, Lattice, and the GEM foundation model
• Why custom silicon (MTIA) makes sense at Meta's scale
• MTIA chiplet strategy — 4 generations in 2 years
• AAOI's vertical integration, Amazon's $4B warrant deal, and the 2017 parallel

Chapters:
0:00 Intro
1:26 Synopsys Converge — Agentic AI Panel
9:44 Vik's Article: Optical Circuit Switching & Arista
14:43 Meta MTIA — A New Chip Every 6 Months
21:32 Why Custom Silicon Makes Sense for Meta
27:22 MTIA Chiplet Strategy & Roadmap
33:56 Gen AI Fits Meta's Business Model
36:31 How Meta Ships Chips So Fast
40:30 Applied Optoelectronics (AAOI) Deep Dive
45:02 Amazon's $4B Warrant Deal
48:54 Can AAOI's Lasers Compete with Lumentum?
53:16 AAOI's Aggressive Capacity Buildout
55:35 History Rhymes: AAOI's 2017 Boom & Bust
1:00:55 Wrap-Up

#semiconductors #chips #tech #meta #MTIA #AAOI #optics #inference #AI

This week, Austin and Vik break down the optics vs. copper debate that rocked semis this week. Nvidia dropped $4 billion on Lumentum and Coherent, Credo posted a blowout quarter betting on copper, and then Hock Tan shocked everyone claiming 400G per lane works over copper in Broadcom’s labs — potentially pushing CPO out to 2030+. Plus, Vik’s 4D chess conspiracy theory on why Hock Tan is talking up copper when Broadcom is a CPO company.

Like, subscribe, and drop your thoughts on the copper vs. optics debate in the comments!

Subscribe to our newsletters:
* Chipstrat by Austin Lyons — chipstrat.com
* Vik’s Semiconductor Newsletter by Vik Sekar  — viksnewsletter.com
Chapters
(00:00) - Newsletter Plugs: Groq LPUs & Broadcom’s Laser Business
(03:15) - Dynamo & the Rise of Workload-Specific Hardware
(08:04) - Austin’s Broadcom Laser Deep Dive
(09:53) - The Week’s Whiplash: Optics Monday, Copper Wednesday
(17:50) - Why Nvidia Invested $4B: Geopolitics, Supply & the HBM Playbook
(24:15) - CPO Lasers & Optical Circuit Switches
(26:16) - Credo Earnings: 200% YoY Growth & the Copper Bull Case
(31:09) - Reliability, AECs & Oracle’s GPU Cluster Problem
(35:48) - Credo’s Optics Play: Micro-LED Active Cables & the CPO Timing Risk
(38:45) - Broadcom Earnings: Hock Tan’s Copper Bombshell
(43:34) - Customer-Owned Tooling: Hock Tan Says “Good Luck”
(44:25) - Vik’s 4D Chess Theory: Why Hock Tan Talks Up Copper
(47:03) - Wrap-Up: It’s Both — The Real Question Is Timing

This week, we move from optics technology to optics companies. We walk the AI optical supply chain from bottom to top. Main debate: Who has a moat? Who is already priced for perfection?  *Not investment advice, do your own due diligence*
AXTI - Indium phosphide substrate supplier. Critical bottleneck in the laser stack. Major China export-control risk. Massive stock run vs thin earnings.
Tower Semiconductor - Leading silicon photonics foundry. 5x capacity expansion with customer prepayments. Strong process lock-in. Pure-play optics exposure.
GlobalFoundries - 300mm monolithic photonics platform + Chips Act support. Optics growing fast but still small piece of overall business.
Lumentum - Dominant EML laser supplier. Explosive AI demand. Strong technical moat. Valuation and capex sensitivity are key risks.
Coherent - Vertically integrated from substrate to module. 6-inch InP push could lower costs structurally. Execution and margin mix matter.
Fabrinet - Optics assembly partner. High NVIDIA exposure. Scales with industry, but dependent on upstream supply.
Corning - AI data centers require far more fiber than traditional cloud. $6B Meta deal adds visibility. Timing of scale-up optics is the swing factor.
Timestamps
00:01 Intro
06:59 AXT $AXTI
13:38 Tower Semiconductor $TSEM
23:58 GlobalFoundries $GFS
32:43 Lumentum $LITE
39:38 Coherent $COHR
47:09 Fabrinet $FN
54:07 Corning $GLW
Austin's Substack: https://www.chipstrat.com/
Vik's Substack: https://www.viksnewsletter.com/

Austin and Vik delve into the evolving landscape of optics and networking, particularly in relation to AI and data centers.

The conversation covers various scales of networking, including scale across, scale out, and scale up, while also addressing the demand-supply dynamics in laser manufacturing and the future of optical circuit switches.

The episode highlights the technological advancements and market opportunities in the optics sector, emphasizing the significance of these developments for the future of AI.

Takeaways
Silicon photonics is becoming crucial for data center connectivity.
Optics is essential for overcoming copper's limitations in speed and distance.
Scale across technology is vital for connecting data centers.
Scale out optics is the standard for connecting GPUs between racks.
Co-packaged optics can reduce energy consumption in data centers.
The scale up market for optics is emerging as a new opportunity.
Indium phosphide wafers are a critical bottleneck in laser manufacturing.
Optical circuit switches are gaining traction in data centers.
2026 is anticipated to be a pivotal year for optical networking. 

Chapters

00:00 Introduction to AI and CPU Bottlenecks
03:00 The Rise of Silicon Photonics
06:01 Understanding Optical Networking and Data Centers
08:49 Scale Across: Connecting Data Centers
11:56 Scale Out: Optimizing Data Center Connectivity
14:53 Scale Up: The Future of GPU Connectivity
23:32 The Shift from Copper to Optical Connections
26:13 Challenges and Reliability of Lasers
30:47 Understanding Co-Packaged Optics
34:17 Market Dynamics: Demand and Supply of Lasers
40:46 Emerging Technologies: Optical Circuit Switches

Check out Austin's Substack: https://www.chipstrat.com
Check out Vik's Substack: https://www.viksnewsletter.com

In this episode of the Semi Doped podcast, Austin and Vik delve into the current state of the semiconductor industry, focusing on the memory crisis driven by increasing demand from AI applications. They discuss the implications of rising memory prices, the impact of hyperscaler spending on the market, and the strategic moves of major players like Google, Microsoft, Meta, and Amazon in the AI landscape.

Takeaways
Memory prices are skyrocketing, impacting consumer electronics.
The memory crisis is affecting the production of lower-end devices.
DRAM prices have doubled in a single quarter, creating challenges for manufacturers.
Nanya Tech's revenue growth indicates a booming memory market.
AI applications are driving unprecedented demand for memory.
Hyperscalers are significantly increasing their capital expenditures for AI infrastructure.
The integration of AI into advertising is reshaping business models for companies like Google and Meta.
Chapters

00:00 The State of Memory in Semiconductors
03:08 Nvidia's GPU Dilemma and Market Dynamics
06:13 The Impact of AI on Memory Demand
09:08 NAND Flash and Context Memory Trends
11:59 The Future of Memory Supply and Demand
15:12 AI Infrastructure and CapEx Spending
17:47 Google's Strategic Investments in AI
20:58 The Advertising Business Model and AI Integration
30:26 Revenue vs. Expenses: A Balancing Act
31:08 The Future of TPUs vs. GPUs in Cloud Computing
35:31 Microsoft vs. Google: AI Investments and Market Reactions
38:22 AI Integration in Enterprises: Microsoft’s Unique Position
39:57 The Power of Microsoft’s Reach in AI
40:30 GitHub: A Hidden Gem for Microsoft’s AI Strategy
43:52 Meta’s AI Strategy: Advertising and Revenue Growth
51:18 Amazon’s Massive CapEx: Implications for the Future
54:00 Looking Ahead: Predictions for 2027 and Beyond

Check out Austin's substack: https://www.chipstrat.com/
Check out Vik's substack: https://www.viksnewsletter.com/