$IQE
High ConvictionInvestment Thesis
IQE makes InP epiwafers — the processed wafer layer between AXT's raw substrates and final laser chips. Landmark Optoelectronics (competitor) is reporting output 'far below customer needs,' validating the epiwafer bottleneck. Called at ~$100M MC, now up 260%+. MTSI invested $45M and took a board seat to secure long-term epiwafer supply — the strongest possible institutional validation of the thesis.
InP epiwafer duopoly alongside Landmark. MTSI's $45M investment locks in strategic supply relationship.
Catalysts
- MTSI invested $45M + board seat — validates epiwafer chokepoint
- Landmark Optoelectronics reporting output far below customer needs
- Point72 quietly bought IQE float after Serenity thesis publication
- CPO laser ramp creates structural multi-year epiwafer demand
- MTSI removes debt overhang — balance sheet de-risked
Risks
- Single-digit revenue growth in legacy segments masks photonics acceleration
- IQE has historically disappointed on execution vs. investor expectations
- Currency risk (GBP)
From the Feed (6 signals)
Genuinely thanks for nice comments. $TSEM hit triple digit return... so that's 16 different names YTD. My YTD hit 1525%+ as a result. Just to recap all the endless abuse along the way: $AXTI - 'Pump and Dump', $AAOI - 'Pumping stock with no fundamentals', $SIVEF - 'Pump and Dump Meme Stock', $LITE - 'Photonics Bubble', $IQE - 'Just pumping low MC stocks', $AEHR - 'Stock with negative revenue growth', $EWY - 'Just from followers', $SOI - 'Pump and dump, no novel idea'. Or how about... the idea around fundamentals was right all along?
Two most viral stories on $RDDT: 1. Turning $252K -> $7.7M with $AMD 2. Turning $167K -> $2.2M with $RKLB. These are likely true, since it's possible to find these niche leaders to change your life. What matters is: finding rare gems / leaders in a niche field, having enough concentration for it to matter, having enough conviction to sit through volatility, letting the thesis play out (even if it's across multiple years). You've already seen me do it multiple times with photonics like $AXTI, $IQE, $SIVE, and others.
$SIVE was a massive transfer from Swedish locals to US investors. Locals waited many, many years for all the laser R&D to pay off for CPO and silicon photonics. And now with hyperscaler volume ramp H2 2026 H1 2027, they don't get any upside because they transferred their shares over to the US/West after trusting local media.
Wow, majority of these 30 stocks I've liked are up a lot in just two weeks. I focus a lot about the 'undiscovered' ones like Riber or $SIVE or $RPI or $IQE in analysis when I make a new entry -> wait for it to play out. But the same thesis around $LITE or $NBIS or $AXTI from last year is still the same. And I don't need to post that same thesis multiple times, since it's not new anymore. But the reason they're not new is because markets have validated the thesis and are repricing the stocks live because of them.
Frontrunning 1.6T/CPO within the broader photonics supercycle is the most compelling investment to me. My high conviction: 1. $SIVE - laser revenue scales aggressively with $JBL, $MRVL, Ayar, O-Net. 2. Shunsin - Foxconn's optical foundry at $1.5B MC vs LWLG. 3. Win Semi - foundry for Sivers + AVBO + SpaceX supply chains. 4. $MRVL - mini-Broadcomm. 5. $HPS.A - Transformers. There's many others like $NBIS, $JBL, $RPI, $TSEM, $LITE, $ARM, $SOI, $AXTI, $IQE, $ALRIB that I'm very fond of.
Just now, $MTSI looking to invest $45 Million into $IQE and sit on the board. What did I say anon??? Landmark was overcapacity... + IQE was a structural chokepoint in photonics the supply chain back at $100M MC. This deal is also to secure long term epiwafer supply.