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Saturday, October 17, 2026

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Semtech Analyst Day Review

Semtech raised Q3 guidance and targets $3.2 billion of fiscal 2030 revenue, excluding upside from its AI data-center optical and copper interconnect businesses.

SMTC $13B
CV's Substack 14 clicks

From X

@convequity

Convequity on X

$TSEM + $SOI: positioned on both sides of the biggest shift in AI datacenter interconnect — and Google's new TPUv8i just supercharged the story. Leg 1 — Smarter optics, much bigger chips. Next-gen optical links ("coherent-lite") encode data far more densely than today's IMDD links. But the sophistication has a physical cost: the photonic chip needs roughly 2–2.5x more silicon area per port, because it packs in multiple modulators, splitters, and detectors where today's simpler links need one of each. Factor in that bigger dies yield worse, and you need ~3–4x the wafer starts per port. More area × more volume × worse yield = several-fold growth in SiPh wafer demand over the cycle. Leg 2 — The switch itself goes photonic. TPUv8i connects its chips through an optical circuit switch (OCS) built from silicon photonics — a genuinely new thing. $GOOGL's old scale-out OCS used MEMS mirrors: zero SiPh content. The new one puts a very large photonic die (300–450mm², heading toward 500–800mm² — near the reticle limit) in every pod. That's a brand-new ~10–20% layer of demand on top of the transceiver story, and it scales faster than linearly as switch radix grows from 64×64 to 128×128. The elegant part: Leg 2 forces Leg 1. The optical switch loses 5–10dB of light — 70–90% of the signal is gone by the time it exits. Today's IMDD transceivers can't read a signal that weak; coherent ones can. So every transceiver plugged into the switch fabric has no choice but to go coherent — and coherent means the 2–2.5x bigger chips from Leg 1. Google's switch decision doesn't just create its own SiPh demand; it automatically triggers the transceiver upgrade too. Tower has manufacturing flows for both legs: high-speed modulator + Ge flows for transceiver PICs, AND mature passive flows for the huge fabric dies. Soitec supplies the photonics-SOI wafers upstream either way — it wins regardless of which foundry takes the socket. One more kicker: Celero, the Alphabet-backed startup tipped for Google's coherent DSP socket, has no fab of its own — its companion photonic chip has to land somewhere, and an open specialty foundry is the obvious somewhere. Risks: coherent modulators migrating to InP/TFLN would leak the PIC leg out of silicon photonics; Marvell verticalizing into its own photonics partially bypasses the open-foundry path.

Investor Letters

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2026.42: Home At Last

Stratechery’s weekly bundle covers Apple HomeView and SpaceX’s cellular ambitions.

AAPL $5T
Stratechery by Ben Thompson – On the business, strategy, and impact of technology. 6 clicks

TSOH Weekly Roundup (10/16/2026)

Bumble agreed to a $1.3 billion take-private deal, while Netflix cut about 1,000 jobs and Meta discussed its Muse superintelligence models.

NFLX $511B
TSOH Investment Research 12 clicks

Is The Market Turning The Page?

CoreWeave’s debt and equity price action is framed as a wake-up call for investors amid a broader market discussion.

CRWV $34B
WHAT ARE WE DOING? “Contrarians At The Gate” 54 clicks

PesoRama: Research Flash

PesoRama will reach 54 JOi Dollar Plus stores by November after raising C$28.4 million, funding more than 50 additional Mexican store…

TBBB $7.2B
Atrium Research - Equity Research 7 clicks
LLY · long

LILLY (ELI) & CO

Eli Lilly trades at 33 times this year’s earnings and 26 times next year’s, versus roughly 12 times for big pharma peers.

LLY $1.2T
Value Investors Club 4 clicks

Modine Deep Dive

Modine, soon Modexus Solutions, has a $4 billion hyperscaler cooling contract but must ramp factory output and restore margins as data…

MOD $7.9B
CV's Substack 20 clicks

AppLovin Deep Dive

AppLovin rebuilt its ad model with AXON 2.0, lifting LTM revenue to about $7 billion and margins to 77% as Unity competition threatens…

APP $92B
Speedwell Research 27 clicks

Constellation: Stars Aligning?

Constellation Brands trades near $127 at roughly 11x next-twelve-month EV/EBIT, with recent business results offsetting concerns over…

STZ $22B
TSOH Investment Research 28 clicks

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