Summary of Key Points from the Conference Call Industry Overview - The conference attended was the European Conference on Optical Communications (ECOC) held in Copenhagen from September 28 to September 30, 2025, focusing on the Telecom & Networking Equipment industry [3][4]. Core Insights - Demand for Optical Technologies: The demand for optical transceivers has more than doubled in the last two years, with significant growth in the Data Center Interconnect (DCI) market, indicating a long runway for demand [4][7]. - Innovation Focus: The industry is shifting towards "blank page innovation" to address challenges, moving away from reliance on traditional telco budgets [4][7]. - Investment in Optical Technologies: Hyperscalers are willing to invest in optical technologies that enhance data transmission reliability and efficiency while reducing power consumption [4][7]. - Emerging Technologies: Key technologies discussed include Optical Circuit Switching (OCS), Co-Packaged Optics (CPO), and thin film lithium niobate (TFLN), with OCS gaining significant traction [7][9]. Company-Specific Insights - Ciena Corporation (CIEN): - CIEN is optimistic about current demand, with over a year of visibility into demand. Their Direct Out-of-Band Management (DCOM) solution, co-developed with Meta, is expected to generate significant revenue [11][12]. - CIEN's valuation is around 22-23x FY26e EPS, reflecting strong positioning in the cloud market [20]. - Coherent Corp (COHR): - COHR has faced supply issues due to an EML shortage but is adjusting build plans to meet increased demand. They are optimistic about future opportunities, particularly with OCS [13]. - The company trades at a discount compared to peers, presenting a potential opportunity if execution improves [13]. - Lumentum Holdings Inc (LITE): - LITE is currently benefiting from OCS adoption, which could significantly impact their valuation positively [9][12]. Market Dynamics - Pricing Environment: There is currently no pricing pressure in the optical space, which typically sees annual price declines of 10-15%. The ability to increase prices is noted, but caution is advised if capital expenditure slows [8]. - Upcoming Events: The next significant event for the industry is the Open Compute Project (OCP) show scheduled for October 13-15, 2025, which may serve as a catalyst for further developments [8]. Risks and Considerations - Supply Chain Constraints: The ability of vendors to meet the high demand is a critical gating item for the industry [7]. - Technological Adoption: While OCS shows promise, its adoption may take time due to the complexity of the technology and the need for significant architectural changes [9]. - Market Volatility: Potential risks include macroeconomic headwinds, pricing pressures, and the impact of tariffs on gross margins [23][26]. Conclusion - The optical communications industry is experiencing robust demand driven by advancements in AI and data center needs. Companies like CIEN, COHR, and LITE are positioned to benefit from this trend, although they face challenges related to supply chain and technological adoption. The upcoming OCP show may provide further insights and opportunities for growth in this sector.
2025 年欧洲光学通信会议：光学领域的高光时刻-Telecom & Networking Equipment-ECOC 2025 Optical's Moment in the Spotlight