Core Viewpoint - AI computing power is becoming the main growth engine in the telecommunications industry, with a focus on investment opportunities in the computing power supply chain and the delivery capabilities of leading optical module manufacturers [1] Group 1: Industry Insights - The computing power sector has shown significant growth, with the semiconductor equipment and AI chip industries facing increased urgency for development due to overseas restrictions, making domestic substitution a prevailing trend [1] - The domestic chip manufacturers have begun to explore solutions such as super nodes to compensate for the performance disadvantages of single cards by leveraging the advantages of multiple card configurations [1] Group 2: Investment Opportunities - The construction of multi-card clusters raises higher demands for the quantity and quality of components, creating greater investment opportunities across the supply chain [1] - Specific segments such as liquid cooling, storage, power supply, optical modules, PCB, and quantum computing are expected to experience higher performance elasticity [1] Group 3: Market Outlook - Since 2025, both Chinese and American technology stocks have performed well, with the computing power sector leading market gains, and there are emerging opportunities on the model and application side [1] - Looking ahead to 2026, the domestic computing power market is expected to thrive, with performance elasticity and investment certainty, potentially replicating the long bull market seen in U.S. stocks since 2023 [1]

Summary of Conference Call Records Industry Overview - The conference call discusses the optical communication sector, focusing on two companies: Lumentum (LITE) and Coherent (COHR) [1][2]. Key Points from Lumentum (LITE) - **Revenue Growth**: LITE reported a 55.9% year-over-year increase in revenue to USD 480.7 million for 4QFY25, with a turnaround to a GAAP net income of USD 213.3 million from a net loss of USD 252.5 million a year prior [2][4]. - **Future Guidance**: Management provided guidance for 1QFY26E revenue between USD 510 million and USD 540 million, indicating a quarter-over-quarter growth of 6% to 12% and a year-over-year growth of 51% to 60% [2][4]. - **Product Demand**: Strong demand from hyperscale cloud customers is driving growth, particularly in the Cloud and Networking segment, which saw a 67% year-over-year increase [2][4]. - **EML Chip Shipments**: Achieved an all-time high in EML chip shipments, nearly doubling revenue compared to the previous year. Transitioning from 3-inch to 4-inch wafers to increase capacity, with potential future moves to 6-inch wafers [4]. - **Major Orders**: Received a substantial order for 200G EML chips, expected to be fulfilled in the December quarter, with 2026 anticipated as a breakout year for 100G and 200G laser chip shipments [4]. - **OCS Expansion**: Expanding Optical Circuit Switch (OCS) capacity in Thailand, with leadership in optical performance expected to capture demand ahead of competitors [5]. Key Points from Coherent (COHR) - **Revenue Performance**: COHR recorded a 16.4% year-over-year revenue growth in 4QFY25, reaching USD 942 million in the data center and communications segment, which contributed 62% of total revenue [6][7]. - **Guidance Shortfall**: Management's guidance for 1QFY26 revenue between USD 1.46 billion and USD 1.60 billion indicates an 8% to 18.6% year-over-year growth, but this fell short of market expectations [6][7]. - **Transceiver Development**: The company began shipments of its 1.6T transceiver in 4QFY25, with expectations for meaningful revenue contributions in FY26. Development of 3.2T transceiver products is ongoing [7]. - **Divestiture Strategy**: The divestiture of the Aerospace & Defense business for USD 400 million is a strategic move to streamline COHR's portfolio, expected to close in 1QFY26 [7]. Additional Insights - **Market Dynamics**: The strong demand for AI infrastructure from global hyperscale AI and cloud players is expected to support sequential growth for optical transceiver players in China [1]. - **Supply Chain Considerations**: Continued supply tightness of key components, particularly optical chips, may benefit optical chip manufacturers [1]. This summary encapsulates the essential insights from the conference call, highlighting the performance and strategic outlook of Lumentum and Coherent within the optical communication industry.