Coherent Expert Interview: Takeaways

Pluggable Transceivers & ASP Trends

2025 Performance: Shipped ~3.1 million 800G units (ASP $415) and 2.2 million 1.6T units (ASP $1,320).

2026 Forecast: Expected to grow to 7.4 million 800G units (ASP dropping to $370) and 3.2 million 1.6T units (ASP dropping to $1,100).

DSP Cost Pressure: A 12% DSP chip price hike starting September 2026 will impact costs beginning Q4 2026; Coherent plans to pass most cost increases downstream via quarterly contract adjustments.

NPO & CPO Roadmap

Mass Ramp (2027): NPO business hits mass ramp in H2 2027, targeting 220k–230k (1.6T), 380k–400k (3.2T), and 70k–80k (6.4T) units. All current designs still require DSP chips.

FAU Supply Chain: HD Optics is a key supplier holding a 45%–48% share for CPO DFAU and ~40% for NPO FAU, with TFC as the other major vendor.

InP Capacity Expansion: Completed the first doubling of 6-inch InP capacity in H1 2026, with a second doubling planned for 2027 to support laser, EML, and NPO/CPO demand.

Optical Circuit Switches (OCS)

2026 Volume: Shipped 1,400 units of the 300x300 bidirectional port model, with Google driving ~1,300 units. The 512x512 large-port version is delayed to 2029.

Future Forecast: Projected at 4,400 units for 2027 (Google ~4,000, NVIDIA ~300) and scaling to 10,500 units in 2028 (adding Meta adoption).

Customer Concentration: NVIDIA and Google account for roughly 48% and 23% of Coherent’s optical module sales, respectively.

Lasers & EML Chips

EML Shipments (2026): 100G EML reaches 17.8 million pieces (~$9 ASP, dropping to ~$8 for bulk orders); 200G EML hits 11.5 million pieces (~$17 ASP).

CW Lasers (300mW): Grew from 1.1 million units (2025) to 3.2 million units (2026), with ASP decreasing from $38 to $34.

Financials & Profitability Targets

Industrial Revenue: Projected at $2.21bn (2025), $2.32bn (2026), $2.48bn (2027), and $2.7bn (2028). (2025 baseline: 34.2% gross margin, 13.1% net margin).

Net Margin Targets: Company-wide net margin is targeted at 17.8% (2026), ~19% (2027), and a long-term goal of 22%–25% from 2028 to 2030.

$Coherent Corp.(COHR.US)