XFAB
🔬 EU CHIPS Act 2
EU CHIPS Act 2.0 proposal includes photonics as new structural addition, benefiting EU photonics leaders like SIVE and XFAB, especially in AI data center optics.
Evidence & details
- +"co-packaged optics for AI data centres (CPO/interconnects focus is bullish read through for $SIVE)"
- +"Capabilities in production technologies including co-packaging and heterogeneous integration with electronic chips, manufacturing equipment, and materials platforms for photonic integrated circuits shall be strengthened ( $XFAB)"
- +"Obviously structurally positive for $XFAB since they're literally leading the European Silicon Photonics Value chain and listed in First of a Kind (FOAK) category."
- ⚡Official EU CHIPS Act 2.0 proposal release with photonics focus
- ⚡Specific policy mentions of co-packaged optics, silicon photonics, and production capabilities
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Post Timeline · 2 posts
EU CHIPS Act 2.0 proposal is now released. Great news: Photonics is now confirmed to be the new structural addition to EU policy. This is thematically bullish for the EU photonics sector. Thematically: - "This new component of the Chips for Europe Initiative supports the d…
Thesis: EU CHIPS Act 2.0 proposal includes photonics as new structural addition, benefiting EU photonics leaders like SIVE and XFAB, especially in AI data center optics.
Europe is releasing its Tech Sovereignty Package, today June 3rd. This includes, CHIPS ACT 2.0, which is expected to prioritize photonics. Both $XFAB and $SIVE are highlighted in the Industry Policy Blueprints, which guides EU legislation. This proposes sovereign backing wit…
Thesis: Europe's Tech Sovereignty Package and CHIPS ACT 2.0 prioritize photonics, providing sovereign financing and revenue incentives. XFAB and SIVE are highlighted in policy blueprints, positioning them as …
XFAB is a compelling long at $1.28B MC with photonics and power semis growth, low P/B, government backstop from EU and US CHIPS acts, and relationships with NVDA, NVTS, and POWI.
source ↗Close relationships with $IQE and $SOI, and familiarity with private photonics companies working with $XFAB, reinforce the bullish thesis on $XFAB as an interesting long idea driven by EU CHIPS Act 2 catalyst.
source ↗XFAB is compelling at $1.5B MC as a critical SiC/GaN pure-play foundry with US government recognition and CHIPS Act backing, positioned to benefit from power semiconductor re-rating and photonics ramp in 2027-2028.
source ↗Current bullish thesis on XFAB at $9, implied by track record of past successful European equity longs.
source ↗Bullish on AAOI, SIVE, and XFAB based on revenue growth projections, photonics demand, and government support.
source ↗$XFAB is undervalued, trading below replacement cost, with dual continent subsidies (US and EU) backing its SiC, GaN, and silicon photonics capabilities. Near-term SiC/GaN demand and upcoming CHIPS Act catalyst provide upside, while legacy drag and macro risks are limited by government support and low valuation.
source ↗Cyclical slump in 2025 with XFAB dragged down near asset replacement value, and legacy automotive cycle near bottom for Melexis/SOI, allowing growth verticals to carry valuations.
source ↗XFAB is leading Europe's photonics supply chain development, and its valuations seem undervalued.
source ↗Europe's Tech Sovereignty Package and CHIPS ACT 2.0 prioritize photonics, providing sovereign financing and revenue incentives. XFAB and SIVE are highlighted in policy blueprints, positioning them as beneficiaries of structural tailwinds for photonics in EU supply chains.
source ↗$SIVE and $XFAB are positioned to benefit from policy incentives for semiconductor manufacturing, as proposals focus on funding and revenue incentives for pre-volume production players.
source ↗XFAB is undervalued below replacement P/B, backed by EU and US CHIPS Acts, with leading customers and evaluations by NVDA and NOK, and is poised to lead high-volume scaling of Europe's photonic supply chains.
source ↗CHIPS ACT 2 includes photonics, and XFAB is mentioned in related reports, potentially benefiting from EU photonics initiative.
source ↗EU CHIPS Act 2.0 proposal includes photonics as new structural addition, benefiting EU photonics leaders like SIVE and XFAB, especially in AI data center optics.
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