$Ciena(CIEN.US) Position these two days, short-term leverage reduced a lot.

The war wiped out more than half of my profits.

Leveraged options: If you haven't learned risk hedging, it's not suitable to buy those around one month; you get killed too fast, time value is the opponent.

Continuing to share what I learned at the end of last year:

Understand OCS switch product structure and value in one article.

2025 Market size: ~$400 million, forecasted to exceed $1.6 billion by 2029.

CAGR: 41%, indicating active investment and innovation.

1. Technology solution comparison: MEM5 vs. Liquid Crystal

MEM5 solution: Advantages are low cost, fast switching speed, small insertion loss, but lower port specifications. Suitable for latency-sensitive applications, such as internal data center networks.

2. Upstream core component layer: Value distribution and suppliers

MEM5 solution (by value, high to low):

MEM5 array/chip (50%): Silex (MEMSIC)

Circulator (16%): CommScope

Fiber Array Unit (FAUI) (11%): TFC

Camera/Laser module (8%): Lume

Lens Array (5%): CommScope

Liquid Crystal solution (by value, high to low):

· Liquid Crystal Modulation Unit (75%): Cohe

· Mechanized/Crystal Grating (12%): CommScope

The MEM5 array and the Liquid Crystal Modulation Unit account for the majority of their respective solution costs, indicating high technical barriers and strong supplier bargaining power for these components.

3. Midstream complete machine manufacturing layer

Supporting customized optical modules: Zhongbiao

OCS complete machine assembly and testing: Guangku/Jienuo, Accelink. Silicon photonics is an emerging technology, being deployed by multiple companies, potentially representing a future trend.

4. Downstream application layer

Cloud provider data centers: Main customers are Google (TPU clusters), Microsoft, Meta, AWS. OCS is used in internal data center networks to improve connection flexibility and efficiency.

6. Mainstream technology routes

MEMS: Mainstream, low cost, balanced performance.

Liquid Crystal: Suitable for high-end applications, high port count.

Silicon Photonic Waveguide: Emerging technology, driven by silicon photonics solution suppliers, potentially offering higher integration and efficiency.

7. OCS product structure and value analysis

Palomar OCS 128 ports, MEMS solution.

MEMS array has the highest proportion in BOM cost, key for cost reduction. Complete machine selling price is $60,000, with relatively high gross margin, indicating significant OCS product added value.

$Lumentum(LITE.US)$Coherent Corp.(COHR.US)