Marvell Wants InP Capacity: Q3 Shows Tighter Supply Upstream as Optical Module Makers Diverge — STT Weekly Review, 2026 W44
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On Oct 28, Bloomberg reported that Marvell is in talks to acquire Lumentum in an all-stock deal valuing Lumentum at about $83 billion; neither company has confirmed. The same week, Intel issued a weak Q4 guide, and optical stocks in Taiwan and China sold off together on Oct 29–30. The market traded optics as one block, but the same week's Q3 reports drew two very different supply chains.
First, the closer a company sits to indium phosphide (InP), the stronger its numbers. AXT's InP substrate backlog jumped from about $100 million to more than $500 million, while Q4 shipments are guided at only about $90 million. LandMark Optoelectronics guided Q4 revenue up about 16% QoQ and plans +150% output in both 2027 and 2028. Corning collected $639 million in customer prepayments. STMicro is expanding silicon photonics capacity more than 4x and says it is still not enough.
Second, module makers are diverging. Innolight's Q3 net income attributable to shareholders rose about 8.5% QoQ, while Eoptolink's fell 19.1%, with inventory climbing to RMB 17.4 billion.
Third, Lumentum, the company Marvell is reportedly pursuing, is a leading supplier of EML and CW lasers, with capacity booked into early 2029.
STT's view: if Marvell does bid, it is buying InP laser capacity locked up by long-term contracts. This quarter, the constraint in optics is upstream, and it gets tighter the further upstream you go.
▲ Q3 supply signals from upstream to module makers: upstream shows long-term contracts, prepayments and capacity limits, while module makers show diverging inventory and profits (Image source: Simple Tech Trend original; data from AXT 8-K, LandMark Q3 call, Corning 8-K, STMicro Q3 call, Innolight and Eoptolink Q3 reports)
Further reading: LandMark Optoelectronics 2026 Q3 earnings call highlights, AXT FY2026 Q3 earnings call highlights.
What's in the Premium Section
The familiar script: why the deal report and Intel's guide got priced in together
Upstream breakdown: AXT's backlog is more than 5x Q4 shipments, and high-power CW lasers cut dies per substrate by 30–50%
Midstream breakdown: capacity timelines and customer prepayments at Corning, STMicro and WIN Semiconductors
Module maker breakdown: how Innolight and Eoptolink went in opposite directions in the same quarter
Deal breakdown: what Marvell would own if it bought Lumentum, and why the market did not buy it
Taiwan supply chain table: LandMark, VPEC, WIN Semiconductors, UMC, Hon. Precision, Chroma, ASE, and the two real bottlenecks
7 counterarguments
7 signals to watch: 3 of them verifiable calls
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That's the summary of this piece.
STT's full analysis—the upstream InP capacity breakdown, the mechanics behind module maker divergence, the deal's impact and where Taiwan's epitaxy makers stand—is in the premium section, with 5 original charts.
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