AI optical communication is not a short-term theme; it is a three-year strong boom from 2026 to 2028. Upstream optical chips are locked in, two major new technologies (NPO/OCS) are exploding, and consumer electronics giants are crossing over to grab a piece of the pie. The entire supply chain is entering a super cycle where "supply determines the magnitude of gains."

II. The most critical information in the first section: The strongest signal for the entire industry

1. Lumentum: Optical chip orders for 2028 are almost fully booked

• LITE (Lumentum) + COHR monopolize the global high-end optical chip market

• 2028 capacity is nearly sold out = supply locked for the next 3 years, demand exploding

• Implication: Prices are easy to rise but hard to fall, earnings are highly certain

2. Zhongji Innolight: Significant increase in prepayments and inventory

• The optical module leader is scrambling for chips and locking in capacity

• Indirectly confirms: Extreme shortage upstream; whoever secures chips makes big money

3. Three major signals prove AI capital expenditure is not burning money, it's jockeying for position

1. Supply chain visibility extends to 2028 → Long cycle, not a short-term boom

2. Model companies' ARR skyrockets → Revenue keeps up with investment, forming a virtuous cycle

3. Cloud vendors' historical CapEx/OCF can exceed 100% → Finance is not the ceiling; securing the ecosystem position is most important

→ The market's previous concern about "AI being unsustainable" has now been completely disproven.

III. Four core judgments (All the investment themes are here)

① AI capital expenditure: Sustainability confirmed threefold

• Optical chip orders extend to 2028

• Model companies' ARR targeting hundreds of billions of USD

• Cloud vendors dare to pour all their cash flow into it

Conclusion: AI investment will continue to exceed expectations, and optical communication is the hardware segment that benefits the most.

② Network hardware is severely undervalued: Optical communication growth rate > Cloud vendor CapEx growth rate

• Google's TPU and other self-developed AI chips are less powerful per card than GPUs, relying on networking to bridge the gap

• Therefore, the growth rate of network hardware (optical modules, optical switches) far outpaces overall capital expenditure

• Scale-up (within super-nodes) bandwidth is 5–10 times that of scale-out, indicating huge potential

Conclusion: Optical communication is not just riding the AI wave; it is the "rigid bottleneck" for AI computing power.

③ NPO + OCS: Explosion of two major new technologies (This is the main upward wave coming next)