--- title: "MACOM took a stake in laser wafer supplier IQE and will sell AI lasers from 2028, against Lumentum" description: "MACOM's fiscal-year release discloses a completed equity investment in IQE plc and a 2028 target for the continuous-wave laser market in the same paragraph. The wafer question Marvell's $115 billion Lumentum takeover left open now has a first mover." publisher: "The Inference" section: "Chips" published: 2026-11-08T18:06:28.710Z modified: 2026-11-08T18:06:28.710Z canonical: https://theinference.org/article/macom-took-a-stake-in-laser-wafer-supplier-iqe-and-will-sell-ai-lasers-from-2028-against-lumentum language: en keywords: "MACOM, IQE, Lumentum, Photonics, Data Center" --- # MACOM took a stake in laser wafer supplier IQE and will sell AI lasers from 2028, against Lumentum > MACOM's fiscal-year release discloses a completed equity investment in IQE plc and a 2028 target for the continuous-wave laser market in the same paragraph. The wafer question Marvell's $115 billion Lumentum takeover left open now has a first mover. On November 5, [MACOM Technology Solutions](https://theinference.org/markets/companies/macom-technology-solutions), the Nasdaq-listed semiconductor maker, [reported fiscal 2026 revenue of $1,327.6 million, up 37.3%](https://www.macom.com/updates/news/2026/macom-reports-fiscal-fourth-quarter-and-fiscal-year-2026-financi) [1]. The forward-looking-statements paragraph of that release, the boilerplate most readers skip, carries the two sentences that matter: a "recently completed" equity investment in [IQE plc](https://theinference.org/markets/companies/iqe-plc), the Cardiff company that grows the indium phosphide wafers inside datacentre lasers, and "the anticipated timing of our entry into new markets, including the CW laser market" [1]. Six days earlier, [Marvell](https://theinference.org/markets/companies/marvell) had [agreed to buy Lumentum, the laser and optical component maker, for $115 billion in stock](https://finance.yahoo.com/markets/stocks/articles/marvell-agrees-115-billion-stock-124936150.html) [2]. The Inference piece on that deal left open who supplies the wafers for AI lasers. MACOM's boilerplate is the first answer on record: a chipmaker that now owns a piece of its raw-material supplier and plans to sell the finished laser itself. ## Data center paid for the push into lasers Fiscal Q4 revenue was $424.8 million, up 62.7% year on year, with datacenter revenue of $188.1 million up about 37% sequentially, book-to-bill at 1.4:1 and record backlog [3]. Datacenter grew 74% in fiscal 2026 and management expects fiscal 2027 to beat that, with first-quarter revenue guided to $450 million to $460 million and datacenter up another 15% sequentially [1][3]. *Chart: **Data center became MACOM's largest end market in fiscal Q4** Bar chart ranking MACOM's fiscal Q4 2026 revenue by end market: data center $188.1 million, Industrial and Defense $164.6 million, telecom $72.1 million.* *MACOM revenue by end market, fiscal Q4 2026 (quarter ended October 2, 2026), US$ millions, as stated by CEO Stephen Daly on the November 5, 2026, earnings call. Source: [3]. [3]* ## The customer becomes the competitor in 2028 Chief executive Stephen Daly [told analysts](https://finance.yahoo.com/markets/stocks/articles/macom-mtsi-q4-2026-earnings-191622989.html) the indium phosphide laser "battle is won or lost on the quality of the facet", and that recent work took it from a facet "cut by a chainsaw" to one "cut by a sushi knife" [3]. The progress, he said, supports "MACOM's strategy to enter the multibillion-dollar CW laser market, which we are targeting for 2028", with lasers planned for 800G, 1.6T and 3.2T links [3]. He added that MACOM will be "a merchant supplier of lasers" and "one of the few U.S.-based manufacturers of this technology" [3]. The market it enters is served by [Lumentum](https://theinference.org/markets/companies/lumentum), whose latest quarter showed revenue of $1.26 billion, up from $533.8 million a year earlier [2], and by Sivers Semiconductors, whose continuous-wave DFB lasers are the core of its datacentre business on roughly $29 million of revenue over the last twelve months, next to MACOM's $1.33 billion [4]. ## The bull and the bear buy from the same wafer IQE's side of the trade strengthened the same week: first-half trading exceeded expectations, revenue guidance was raised on accelerating indium phosphide demand from AI datacentre photonics, the company carries no bank debt, and the shares [closed 5.3% higher at 36.60p](https://kalkinemedia.com/uk/stocks/artificial-intelligence/why-are-iqe-lseiqe-shares-surging-after-a-trading-update-driven-by-ai-photonics-demand) [5]. In April, IQE banked an [£81 million fundraise](https://uk.finance.yahoo.com/news/iqes-macom-nvidia-exciting-shares-145800064.html) built around MACOM's strategic investment plus long-term supply agreements for indium phosphide and gallium nitride, with Panmure Liberum calling the balance sheet "secured" [6]. That is the bull case, a funded and locked demand curve. The bear case sits in Daly's own words about supply: "We engage very privately and confidentially with our supply chain. We make sure that we are getting the wafers we need" [3]. A shareholder who is also the buyer can shape the wafer price, and the substrate behind it is scarce: [China holds 70% of world indium phosphide supply](https://thenextweb.com/news/iqe-indium-phosphide-china-export-controls-supply-risk) and wafer prices rose about 250% in June [7]. ## Two documents settle it Neither company has disclosed the size or the terms of MACOM's stake [1]. Two documents price the risk. MACOM's fiscal 2026 Form 10-K, which carries equity investments in its notes, will say how much of IQE the buyer owns [5]. IQE's next regulatory news service statement, which must show whose demand the raised guidance assumes, will say whether MACOM counts as wafer customer or future rival [5]. Until they land, IQE's 36.60p values a demand curve whose strongest named beneficiary turns competitor in 2028 [5]. ## Takeaway MACOM's fiscal-year boilerplate discloses a completed equity stake in IQE and a 2028 target for the CW laser market, making the chipmaker both wafer supplier's shareholder and Lumentum's future competitor. ## Sources 1. [MACOM press release, MACOM Reports Fiscal Fourth Quarter and Fiscal Year 2026 Financial Results, 5 November 2026](https://www.macom.com/updates/news/2026/macom-reports-fiscal-fourth-quarter-and-fiscal-year-2026-financi) 2. [Investing.com via Yahoo Finance, Marvell agrees $115 billion all-stock deal to buy Lumentum, 2 November 2026](https://finance.yahoo.com/markets/stocks/articles/marvell-agrees-115-billion-stock-124936150.html) 3. [The Motley Fool via Yahoo Finance, MACOM (MTSI) Q4 2026 Earnings Call Transcript, 5 November 2026](https://finance.yahoo.com/markets/stocks/articles/macom-mtsi-q4-2026-earnings-191622989.html) 4. [Reddit r/SIVE_Stock, MACOM just said it's coming for Sivers' turf, the CW laser market, in 2028, 7 November 2026](https://old.reddit.com/r/SIVE_Stock/comments/1xpb5l7/macom_just_said_its_coming_for_sivers_turf_the_cw/) 5. [Kalkine Media, Why Are IQE (LSE:IQE) Shares Surging After A Trading Update Driven By AI Photonics Demand?, 6 November 2026](https://kalkinemedia.com/uk/stocks/artificial-intelligence/why-are-iqe-lseiqe-shares-surging-after-a-trading-update-driven-by-ai-photonics-demand) 6. [Proactive via Yahoo Finance UK, IQE's MACOM deal and link to Nvidia are 'exciting', but shares downgraded after surge, 29 April 2026](https://uk.finance.yahoo.com/news/iqes-macom-nvidia-exciting-shares-145800064.html) 7. [TNW, IQE's CEO warns on indium phosphide supply. China has 70% of it, Bloomberg reports, 8 September 2026](https://thenextweb.com/news/iqe-indium-phosphide-china-export-controls-supply-risk) --- MACOM took a stake in laser wafer supplier IQE and will sell AI lasers from 2028, against Lumentum — The Inference. Canonical: https://theinference.org/article/macom-took-a-stake-in-laser-wafer-supplier-iqe-and-will-sell-ai-lasers-from-2028-against-lumentum