AI demand is driving a price increase for indium phosphide (InP) epitaxy, a critical material for optical communications. Taiwan's leading InP epitaxy companies
— IET-KY, Visual Photonics, and LandMark — are expanding capacity to meet this demand, anticipating further price hikes. The supply shortage of InP substrates, compounded by geopolitical factors and rapid AI market growth, is exacerbating the imbalance, leading to active capacity lock-in negotiations and a "highest bidder wins" market for InP epitaxy. NVIDIA's Rubin platform is cited as a key driver for the optical communications super cycle.