AI Data Center Demand Sells Out Lumentum's Optical Capacity Through Early 2029

Lumentum Holdings CEO Michael Hurlston said on Oct. 9, 2026, in Tokyo that the company's optical component capacity is fully sold out through early 2029, as tech companies race to build faster AI data centers. For some products, about 70% of demand cannot be met in 2027, and for others, a 30% demand gap remains in 2028.

In April 2026, Hurlston had expected full-year 2028 capacity to be booked within two quarters. To keep up with surging demand, Lumentum has increased capacity at its key Tokyo metropolitan-area plant by 12 times over the past two years and plans to invest at least $350 million in that facility and nearby sites. It has also expanded its Caswell, UK facility. Hurlston noted that building new capacity takes three to five years, and hyperscale cloud providers have agreed to share some capital expenditure risk.

To expand its product portfolio, Hurlston said the company may make acquisitions in 2027, adding capabilities it currently lacks. Lumentum supplies advanced indium phosphide components that enable high-speed cloud computing and data transmission. The company reported stronger-than-expected revenue and profit for the fourth quarter of fiscal 2026, helped by robust demand for optical components in AI data centers.