Two expansion announcements in one day for the optical gear that lets chips inside AI datacenters talk to each other, and both have governments writing checks. Israeli foundry Tower Semi, backed by the Japanese government, is expanding production of photonics chips that move data with light, with 2028 profit targets that look attractive against today's market cap. America's Applied Opto broke ground on a Texas factory the size of five football fields for optical modules, funded by the city plus state subsidies. One caveat: the Applied Opto news is the groundbreaking of a previously announced plan, not a new one. Serenity's point is the pattern, not the individual names: after chips, governments are now reaching down to the component level of AI infrastructure with subsidies.
Why it matters · Optics is the interconnect layer of the AI buildout, and governments from Japan to Texas are now subsidizing it.
Worth asking · The optics rally: early innings or overheated?