Coherent showcases 1.6T SiPho running on Nvidia 5nm DSP: Barclays

Coherent (NYSE:COHR) unveiled a 1.6T SiPho solution running a 5nm Nvidia (NASDAQ:NVDA) digital signal processor, but it will likely not be available until late 2025, according to Barclays.

Coherent showcased the product during the European Conference on Optical Communications 2024 in Germany this week.

Coherent was up nearly 5% during Thursday morning trading. Nvidia climbed about 3%.

“The instant reaction of observers, that this is a significant threat to Marvell (NASDAQ:MRVL), is overblown, in our view, as deployments will be limited to NVDA only (branded Mellanox) and likely not until late 2025,” said Barclays analyst Tom O’Malley, in an investor note. “However, it’s clear this is the first step in NVDA marching towards something that mirrors an LPO solution after they have more experience in Optics.”

Still, the existence of a 5nm DSP from Nvidia might still pressure companies like Marvell and Broadcom (AVGO) long term.

“A big takeaway from the show is how 1.6T volume adoption is really a 2026 story in volume, with only NVDA and Google (GOOG)(GOOGL) pushing forward at 100G/lane speeds,” O’Malley said.

“When we think about impact to MRVL in the long run, we assume that aggregation at customers that traditionally take off-the-shelf NVDA product would be the first to feature this, meaning Microsoft (MSFT), Coreweave, Lambda, etc.,” he added. “Our first reaction is around 10-20% of the market would be competitive in 2026.”