Surging Profits and Capacity Expansion Bolster Leadership in High‑Speed Optical Chips

Key Points

Explosive Top‑ and Bottom‑Line Growth

Yuanjie Semiconductor delivered staggering projected earnings for H1 2026, driven by robust demand for AI‑data‑center‑grade optical chips. Gross and net margins have expanded sharply on product‑mix improvement and operating leverage, marking a powerful profitability inflection point.

Large‑Scale Capacity Buildout Underway

The firm is executing a RMB 1.251 billion second‑phase manufacturing project to scale high‑speed optical‑chip output. Leveraging its in‑house IDM capabilities, Yuanjie aims to capture larger global market share amid tight industry supply.

Broad Next‑Generation Product Roadmap

Validated 100G PAM4 EML devices, mass‑produced high‑power CW lasers, and active R&D for CPO/NPO and OIO position the company across near‑term shipments and future optical‑interconnect architectures.

Yuanjie Semiconductor (688498.SH), a domestic leader in high‑speed optical chips, has released its 2026 half‑year earnings guidance, pointing to dramatic year‑over‑year business expansion. The company forecasts H1 revenue between RMB 900 million and RMB 950 million, representing 339.13%‑363.53% year‑over‑year growth. Projected net profit attributable to parent shareholders ranges from RMB 600 million to RMB 650 million, up 1196.91%‑1304.98% year‑over‑year. Non‑GAAP net profit attributable to parent companies is expected to land between RMB 500 million and RMB 550 million, a 1001.87%‑1112.06% increase versus the prior‑year period.

Profitability metrics have improved substantially on the back of favorable product‑mix shifts. The company posted a 58.11% gross margin in full‑year 2025, rising 24.79 percentage points year‑over‑year. In Q1 2026, gross margin expanded further to 77.81%, climbing 33.17 percentage points year‑over‑year and 13.83 percentage points quarter‑over‑quarter. Net margin reached 50.51% for Q1 2026, reflecting a 33.54‑percentage‑point year‑over‑year increase and an 11.54‑percentage‑point sequential improvement.

Yuanjie is pushing ahead with major capacity expansion to sustain its competitive edge in the global optical‑chip market. The company plans to construct Phase‑II of its optoelectronic semiconductor chip and component R&D and manufacturing base, with total planned investment of roughly RMB 1.251 billion, funded through internal resources and external financing. The project carries an 18‑month construction timeline. Centered on high‑speed optical‑chip production, the facility will address rising demand from data‑center infrastructure and support digital‑economy‑driven requirements for core optical‑communication components. Drawing on its self‑reliant end‑to‑end IDM expertise and established customer base, Yuanjie intends to lift global market share and overall competitiveness via expanded production capacity and process optimization.

The firm has made solid technical progress across multiple next‑generation product lines. Its 70 mW and 100 mW CW laser products are already in volume production and shipping to customers. The 100G PAM4 EML has completed customer qualification testing, while qualification work for higher‑speed 200G PAM4 EML solutions is ongoing. For CPO and NPO use cases, Yuanjie has developed 300 mW high‑power CW light sources; preliminary R&D work targeting OIO technologies is also in progress. In parallel, the company collaborates with global and domestic equipment vendors to develop DFB and EML chips for next‑generation 25G/50G PON systems.

Risk Disclosures

Potential delays in capacity‑project execution; slower‑than‑expected data‑center capital spending; intensified global competition for optical chips; technical‑certification risks for new‑generation products; fluctuations in product pricing.