Morgan Stanley reports that 2027 optical engine shipments are modeled at 6–7 million units, significantly lower than investor expectations of 20–30 million units. The analysis highlights that even if TSMC expands PIC (Photonic Integrated Circuit) capacity to 10k wafers per month by 1Q27, SoIC yield rates of 50–60% remain a critical constraint. The sentiment suggests a bearish outlook for the photonics sector due to these projected production and yield limitations.