Stocks in the optical communications sector are experiencing widespread declines. At the time of writing, FIT HON TENG (06088) is down 8.33% at HK$7.15, YOFC (06869) has fallen 7.99% to HK$2.35, TIME INTERCON (01729) has dropped 7.85% to HK$1.635, and CIG (06166) is 6.18% lower at HK$1.23.

The weakness follows a sharp overnight sell-off in U.S. optical communications stocks. Applied Optoelectronics plunged over 17%, Coherent fell more than 11%, Lumentum dropped over 8%, and Corning declined more than 7%.

Catalyst for the Sell-Off

The downturn is linked to a report from the prominent AI industry analysis firm SemiAnalysis, which highlighted potential delays in two core technology paths for AI data centers. The report suggests that Nvidia's 800VDC power architecture may not ship until 2028, and the mass production of Co-Packaged Optics (CPO) could be postponed to 2028 or even 2029.

Contrasting View from Nvidia

However, a contrasting perspective has been reported. Veteran semiconductor and technology investment journalist Tae Kim published a transcript of a one-on-one interview with Gilad Shainer, Nvidia's Senior Vice President of Networking, conducted during Computex. In the interview, Shainer stated, "The most exciting thing today is co-packaged optics, it's the leading edge of technology." He further revealed that Nvidia is ready to begin shipments, with partner Lambda having published a blog confirming receipt of CPO switches. He indicated that CPO volume ramp-up will accelerate in the second half of the year and will extend from scale-out to scale-up scenarios.