AI Boom Drives Price Spike for Indium Phosphide, Key Data Center Material

pstAsiatech · x · 2026-08-20

The rapid AI buildout is sparking demand for indium phosphide (InP), a substrate used to power next-generation optical transmission in data centers. As a major producer, China has seen prices climb sharply. Nomura reports that 2-inch InP substrates surged to 880 yuan per wafer in June from 500 yuan at the end of 2025, while 3-inch wafers rose to about 3,200 yuan from 1,800 yuan. The industry is mulling further price hikes of up to 10% in Q4. Japanese producer JX Advanced Metals is also introducing revisions that could raise prices to two to three times previous levels.

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