# Lumentum sells out of AI optical parts through 2029 as the US suspends Microsoft and Indian IT firms from green-card sponsorship

A supplier backed by Nvidia says its lasers are allocated for years, while Washington accuses large technology employers of abusing the visa system and Microsoft disputes the charge.

- Published: 2026-10-09T05:18:28.882Z
- Canonical: https://polylog.news/2026-10-09/lumentum-sells-out-of-ai-optical-parts-through-2029-as-the-u
- Publisher: Polylog (Global desk)
- Section: tech
- Sources: [The Japan Times](https://www.japantimes.co.jp/business/2026/10/09/companies/lumentum-ai-server-sold-out/), [The Japan Times (Business)](https://www.japantimes.co.jp/business/2026/10/09/companies/microsoft-us-visa-program-ban/)

Lumentum, an optical components maker backed by Nvidia, has [sold out of its artificial-intelligence (AI) server parts until 2029](https://www.japantimes.co.jp/business/2026/10/09/companies/lumentum-ai-server-sold-out/). The company makes advanced devices from indium phosphide, a semiconductor material, that move data at high speed inside data centers and between them. Its chief executive has said [shipments are more than 30% below customer demand](https://www.tomshardware.com/tech-industry/semiconductors/lumentum-ceo-says-the-indium-phosphide-shortage-will-become-worse-than-memory) even though the company runs five indium phosphide wafer plants. A new plant in Greensboro, North Carolina, is expected to start production in early 2028.

The same day, Washington tightened its control over technology labor. Vice President JD Vance and Labor Secretary Keith Sonderling [suspended Microsoft, Adobe, Cognizant, Infosys, Tata, Wipro, HCL Technologies and Capgemini](https://www.aljazeera.com/economy/2026/10/8/us-suspends-microsoft-and-adobe-from-visa-programme-amid-fraud-claims) from the Permanent Labor Certification Program (PERM). Companies use PERM to sponsor foreign workers on H-1B and other visas for permanent residence. Vance said Microsoft laid off 6,000 American workers while obtaining 6,300 H-1B visas. Microsoft replied that 80% of those visas extended or changed the status of existing employees. The suspension [came hours before the president honored Microsoft's chief executive](https://www.japantimes.co.jp/business/2026/10/09/companies/microsoft-us-visa-program-ban/) with a medal at a summit on US scientific leadership.

India's IT services companies, which already rely less on US visas than they once did, [have reacted with little public concern](https://theregister.com/legal/2026/10/09/indias-tech-giants-shrug-off-changes-to-usas-skilled-visa-program/5302154). The measure does affect their US-based staff who hope to become permanent residents, and those employees now have a reason to look at other countries.

## What this means

The constraints on building AI capacity are now physical and political. They include optical lasers sold out for years and a state deciding which firms may keep foreign engineers. Scarce component makers such as Lumentum gain pricing power. Cloud companies and the lenders financing data centers carry the risk of delays, because a data center cannot connect its chips without the optical parts. The visa suspension is a negotiating tool: the government can apply it or lift it depending on how firms behave politically, as the medal ceremony on the same day shows. That makes US immigration status less predictable for skilled workers and pushes Indian IT firms to move more delivery work offshore. Markets mostly treat AI capital spending as limited by money. The sold-out order book shows supply is the tighter limit until new plants open in 2028. The desk's read is that suppliers of indium phosphide and optics will keep pricing power through 2027. A slowdown in hyperscaler capital-spending plans would prove this read wrong, because it would free up allocated capacity.

## What to watch

- Capital-spending guidance from the largest cloud providers in this quarter's earnings. Any cut would free up Lumentum's allocated capacity and weaken the shortage.
- Whether the Labor Department restores PERM access for any suspended firm. A quick restoration would show the suspension is being used as a political bargaining tool.
- New Indian IT delivery centers in Canada, Mexico or India that replace US-based roles. These would show the visa policy moving work out of the United States.