Lumentum Holdings Inc. (NASDAQ: LITE) experienced a sharp pre-market plunge of 5.69% on Tuesday, significantly underperforming the broader market.

The steep decline was primarily driven by renewed investor concerns over delays in the mass production of co-packaged optics (CPO). An independent research report from SemiAnalysis indicated that CPO timelines could be pushed back to 2028 or even 2029, citing critically low system-level yields of approximately 19%, which is far below production-ready standards. This assessment has continued to suppress sentiment across the optical communications sector. Adding to the downward pressure was broad weakness within the Communication Equipment sector, which intensified the negative linkage effect on stocks like Lumentum.