Midwestern Investor
· The Midwestern Investor
· March 13, 2026 at 16:42
· ⏱ 6 min read
| Read on Substack ↗
Summary
The article argues that recent engineering critiques of Himax's CPO technology miss the point: the company's architecture is just Gen 1 in a multi-year roadmap, with Gen 2 targeting >6.4T bandwidth and meaningful revenue by 2027. Because Himax trades at a low multiple while rivals are priced for perfection, the author sees asymmetric upside for patient investors despite near-term uncertainty.
•Himax CEO confirmed Gen 2 product finalization targeting bandwidth >6.4T with potential revenue contribution starting in 2027.
•Critiques from Irrational Analysis focused on grating couplers and engineering trade-offs, but the author counters that every architecture is a compromise and generations evolve.
•Himax's partnership with TSMC (COUPE) suggests the chip design is tailored to TSMC's desired trade-offs, not an experimental project.
•The author believes Himax's valuation previously assigned zero value to its AI optical interconnect potential, while many photonics peers are priced for perfection.
•Additional FUD (from Funda AI and Photon Capital) about supply chain and moat defensibility are acknowledged but dismissed as not disproving the thesis — answers require time and roadmap visibility.
Author states Himax is designing its chips to meet TSMC's desired trade-offs for the COUPE program, implying TSMC benefits from successful CPO roadmap validation and potential production ramp alongsid
Author states Himax is designing its chips to meet TSMC's desired trade-offs for the COUPE program, implying TSMC benefits from successful CPO roadmap validation and potential production ramp alongside Himax's Gen 2.
Risk: Himax's roadmap is still early; if validation fails or TSMC shifts to alternative partners, TSMC's exposure is minimal given its scale.
Author defends Himax against technical critiques by highlighting its multi-year CPO roadmap, Gen 2 production readiness by 2027, low valuation providing a favorable entry point for AI optical intercon
Author defends Himax against technical critiques by highlighting its multi-year CPO roadmap, Gen 2 production readiness by 2027, low valuation providing a favorable entry point for AI optical interconnect exposure, and limited downside from a solid core business.
This newsletter, published March 13, 2026,
features Minnvestor
discussing TSM, HIMX.
2 trade ideas extracted by AI with direction and confidence scoring.