Core Insights - Lumentum reported a significant revenue increase of 65% year-over-year for Q2 of fiscal year 2026, reaching $665.5 million, driven by its AI business [1] - The company has a backlog of over $400 million in Optical Circuit Switch (OCS) orders and has secured several hundred million dollars in new orders for Co-Packaged Optics (CPO) [1] - Q3 revenue guidance is strong, with expectations of $780 million to $830 million, representing over 85% year-over-year growth [1] - The CEO highlighted that the explosive growth in bandwidth and energy efficiency demands from AI data centers marks the strongest growth period in Lumentum's history [1] Industry Insights - OCS switches are network devices that directly exchange optical signals and reconstruct paths, capable of seamlessly handling business rates from 400G to 1.6T and beyond, ensuring extreme bandwidth and forward compatibility [2] - Compared to traditional electrical switches, OCS offers advantages such as low latency, low power consumption, and high reliability, supporting seamless interconnection of next-generation devices and extending hardware lifespan [2] - OCS is primarily applied in three scenarios for AI computing clusters: Scale-Up, Scale-Out, and Scale-Across [2] - Huaxia Securities believes that CPO technology has entered its commercial year, driven by AI computing power, with 800G optical modules achieving scale applications and 1.6T modules beginning to ramp up [2] - Major overseas companies and leading domestic enterprises are advancing mass production simultaneously, with orders and performance gradually being realized and domestic production rates rapidly increasing [2] Company Developments - Huagong Technology has released the second-generation single-wave 400G optical engine, the industry's first 3.2T CPO optical engine, and the first PCIe 6.0 optical module, which will further promote the R&D and manufacturing process of 3.2T optical modules [3] - DiAo Micro is currently developing a high-value analog-to-digital conversion product for use in OCS switches, making forward-looking layouts in the OCS switch field [3]