Ezconn moves up AI optics chain with CPO and silicon photonics

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Ezconn expects US cloud providers' AI data center expansion to sustain demand for high core count optical products through at least 2029, according to President Ying-hua Chang. The Taiwan-based optical communications supplier has order visibility through the end of 2026 and expects stronger second-half results, supported by 13,824-core products and overseas tenders, including Thailand. Ezconn remains confident that full-year revenue will post double-digit growth. Ezconn is also targeting co-packaged optics, or CPO, through affiliate Her Sheng, which has submitted samples for validation by a major US customer. Small-volume pilot production could begin in the second half of 2026. High core count products drive AI data center demand Passive optical products will remain Ezconn's main growth driver in 2026 and could outperform 2025 if material supply stays stable. Active components remain under pressure from Chinese competitors, pushing Ezconn towards higher-specification products and new applications, including CPO-related components. RF connectors are gaining momentum from demand for modular AI components and low-earth-orbit satellite tenders. High core count products now make up more than 60-70% of Ezconn's passive optical shipments. Beyond mainstream 3,456-core and 6,912-core products, Ezconn is preparing higher core count specifications as AI data centers require faster transmission and denser cabling. Chang said Ezconn's 13,824-core product has entered deployment and testing and has been delivered to customers for validation. Small-volume shipments are expected to contribute revenue in the second half of 2026, support gross margin performance, and show stronger volume growth in 2028. Ezconn is seeking a larger supply share with major US customers after supporting around 40 AI data center sites in the US. It is also pursuing tenders in Malaysia, Singapore, and Thailand to diversify revenue, with a Thailand AI data center project potentially advancing by the end of 2026 and contributing more meaningfully in the first half of 2027. CPO and silicon photonics move Ezconn up the AI optics chain Ezconn is investing in design, development, and manufacturing for silicon photonics (SiPh) and CPO applications. Through AuthenX, it is targeting ELS modules and FAU products through direct entry or contract manufacturing. AuthenX has submitted FAU products for validation by a major US customer, with small-volume pilot production expected in the second half of 2026 and gradual volume growth from 2027 to 2028. AuthenX is also advancing its IPO plan and could apply for registration on Taiwan's Emerging Stock Board (ESB) as early as the late second quarter or third quarter 2026 if filings proceed smoothly. Ezconn has moved upstream through an alliance with IET-KY, gaining access to key epitaxial materials such as indium phosphide, or InP. The materials-packaging integration is intended to strengthen Ezconn's next-generation high-speed AI transmission components. Ezconn sees IET-KY's III-V compound semiconductor materials as critical to SiPh. The companies plan to continue cooperation and jointly develop technologies and products as demand scales. In low-earth-orbit satellite applications, Ezconn-invested TMY Technology focuses on signal transmission from ground stations to aerial platforms, with RF high-frequency connectors as its core products. Together with IET-KY, AuthenX, and TMY Technology (Tmytek), Ezconn is building a dual-track strategy across SiPh and low-earth-orbit (LEO) satellites. Ezconn's Philippines plant, invested in 2025, has around 40 employees and is expected to reach about 100 by the end of 2026. The site currently handles small-volume production of lower-specification products while focusing on quality improvement and management stability. The Philippines facility will later support capacity expansion and meet customer demand for geopolitical risk mitigation and non-China supply chains. It will also allow Ezconn to coordinate more flexibly with Taiwan production and improve supply chain resilience. Ezconn noted a broad industry shortage of upstream optical fiber. As supply tightens and raw material costs rise, the company plans to pass on higher costs gradually while protecting gross margins through new products and product mix optimisation. Coordination with major customers has secured Ezconn's 2026 material supply. The company is also preparing 2027 materials in advance to reduce shortage risks, with inventory expected to rise alongside demand. Despite pressure from war, labour costs, tariffs, and raw material inflation, Ezconn expects 2026 revenue to maintain double-digit growth. The company also expects second-half performance to exceed the first half, in line with its historical pattern. Ezconn expects second-quarter gross margin to improve from the first quarter, when product mix included more low-margin trading business. A better product mix should strengthen profitability, while current order lead times remain around two months and supply chain operations are stable. Ezconn sees AI reshaping both demand volume and technology requirements. AI data center construction is multiplying demand for optical communications components, as AI clusters require large-scale optical connections and branching technologies, positioning Ezconn's passive optical products to scale with data center expansion. Technologically, Ezconn's move into silicon photonics and CPO marks a shift from hardware assembly towards higher-barrier fields closer to chip-level integration. Its upstream push into III-V compound semiconductor epitaxial wafers, including InP, is aimed at securing key materials and accelerating next-generation high-speed AI transmission components. Article translated by Levi Li and edited by Jack Wu