Michael Hurlston, CEO of U.S.-based optical communications component supplier Lumentum, warned that the next bottleneck in AI infrastructure will be a shortage of indium phosphide (InP), a niche semiconductor material, and predicted that the severity of this shortage will exceed that faced by the memory industry.Indium phosphide is a key material for AI data center transceivers, optical amplifier pump lasers, and co-packaged optical (CPO) engines alongside GPUs. Hurlston noted that the supply-demand imbalance for indium phosphide currently facing Lumentum has exceeded 30 percent, and NVIDIA(NVIDIA) has invested in Lumentum and Coherent, the two major InP producers. Coherent plans to double its in-house InP production by the end of 2026 and double it again in 2027.