According to the Zhongtai Securities Research Report, the increase in AI capital expenditure and the increase in demand for optical communication have led to a high increase in demand for indium phosphide substrates. Indium phosphide is a compound semiconductor material. In the field of optical communication, indium phosphide has always been the core chip material. According to Omdia and Yole, the total global demand for indium phosphide substrates in 2025 is about 2 to 2.1 million pieces, and the global effective compliance production capacity is only 600,000 to 700,000 sheets. The supply and demand gap of close to 70% continues to boost the industrial boom. Lumentum predicts that AIDC's demand for indium phosphide will grow at a compound annual rate of 85% by 2030. Deterministic growth in demand for indium phosphide and downstream inventory will drive the upward trend in demand for indium. Supply is highly concentrated, and enterprises are doubling their production to meet the growing demand. Due to high technical barriers in indium phosphide single crystal growth equipment and technology, there are few participants in the indium phosphide substrate market and mainly foreign manufacturers. The concentration of leading companies is high, and the monopoly pattern is obvious. The localization process has accelerated in recent years. Since 2026, core indium phosphide substrate companies have continued to expand production to meet the growing demand.

According to the Zhongtai Securities Research Report, the increase in AI capital expenditure and the increase in demand for optical communication have led to a high increase in demand for indium phosphide substrates. Indium phosphide is a compound semiconductor material. In the field of optical communication, indium phosphide has always been the core chip material. According to Omdia and Yole, the total global demand for indium phosphide substrates in 2025 is about 2 to 2.1 million pieces, and the global effective compliance production capacity is only 600,000 to 700,000 sheets. The supply and demand gap of close to 70% continues to boost the industrial boom. Lumentum predicts that AIDC's demand for indium phosphide will grow at a compound annual rate of 85% by 2030. Deterministic growth in demand for indium phosphide and downstream inventory will drive the upward trend in demand for indium. Supply is highly concentrated, and enterprises are doubling their production to meet the growing demand. Due to high technical barriers in indium phosphide single crystal growth equipment and technology, there are few participants in the indium phosphide substrate market and mainly foreign manufacturers. The concentration of leading companies is high, and the monopoly pattern is obvious. The localization process has accelerated in recent years. Since 2026, core indium phosphide substrate companies have continued to expand production to meet the growing demand.