Convequity has fully exited its position in Lumentum, citing soft high-power CW laser demand, CPO deployment delays, and a shift towards aggressive Chinese suppliers and silicon photonics. The firm redeployed capital into Tower Semiconductor, which it believes sits at the critical hybrid-bonding bottleneck for photonic and electronic ICs. Tower Semiconductor's expertise in high-yield hybrid bonding is seen as a decisive advantage amid industry CPO yield challenges.
Hybrid bonding for photonic and electronic ICs is emerging as a critical bottleneck for CPO deployment, shifting value to specialized foundries like Tower Semiconductor.