New shortage: Mitsubishi Electric struggles to cope with demand for optical components for AI data centers

Japanese Mitsubishi Electric Corp. is trying to cope with the growing global demand for optical components used in AI data centers, Bloomberg reports. The company controls almost half of the global market for optical data transmission devices for data centers, producing high-performance laser diodes, modulators and assemblies that are used in transceivers. At the same time, this area accounts for a very small share of the company’s revenue.

Bloomberg reports that, for example, in the United States, without exaggeration, all hyperscalers are in one way or another clients of Mitsubishi Electric. According to a company representative, as early as next month Mitsubishi Electric will be able to increase the production of optical components by 50% compared to last year, but this will still not be enough to satisfy all the requests it receives. It will be necessary to double production compared to what it will be capable of in September.

The statements by the company’s official representative were the latest in a series of signs of a shortage of components for AI infrastructures. Mitsubishi Electric estimates that demand from the top five US providers is “very strong” and growing. Just the other day, the company promised to begin shipping sample solutions for 800 Gbit/s and 1.6 Tbit/s networks.

Image source: Mitsubishi Electric

Optical components account for only a small part of Mitsubishi Electric’s business, which produces products ranging from industrial robots to satellite equipment. The related semiconductor and devices division contributed 4% of the company’s revenue last fiscal year. In June, experts already warned of an increase in demand for optical equipment for data centers.