Key Takeaways:
Tianfu Communications Co., a Chinese maker of optical components for data centers, said first-half net profit likely rose as much as 45%, the latest supplier to benefit from surging demand for high-speed optical gear used in artificial intelligence infrastructure.
"Global AI industry acceleration and data center construction are driving steady growth in high-speed optical component demand," the company said in a filing to the Shenzhen Stock Exchange on Friday. Tianfu cited its vertically integrated technology platform and automated manufacturing as factors that helped convert higher revenue into profit growth.
The Suzhou-based company expects attributable net profit of 1.12 billion yuan ($155 million) to 1.30 billion yuan for the six months ended June 30, up from 899 million yuan a year earlier. Non-GAAP net profit, which excludes share-based compensation and other items, is forecast at 1.09 billion yuan to 1.28 billion yuan, representing growth of 26% to 48%. The midpoint of the guided range implies a 35% year-on-year increase, outpacing the broader optical component sector's estimated 20% to 25% expansion, according to industry data.
The results underscore how the AI buildout is reshaping the optical component supply chain, where companies like Tianfu and Applied Optoelectronics Inc. are racing to add capacity. AOI is constructing nearly 400,000 square feet of manufacturing space in Pearland, Texas, to boost optical transceiver output, with production slated to begin by 2027. The global data center connectors market, which includes optical interfaces, reached $4.8 billion in 2025 and is projected to grow at a 10.7% compound annual rate to $14.5 billion by 2035, according to Global Market Insights, with optical connectors — the fastest-growing segment — advancing at 12.1% annually.
Tianfu flagged foreign exchange losses as a partial drag on profit growth, with financial expenses rising year-on-year due to yuan volatility. The company also noted that tight supply of certain components constrained capacity expansion for some product lines, though the impact was not material to overall results. Non-recurring items, including the tax benefit from employee equity incentive vesting, contributed an estimated 20 million yuan to 35 million yuan to net profit.
Tianfu shares closed at 211.37 yuan on Thursday, giving the company a market capitalization of about 231 billion yuan ($32 billion). The stock has gained roughly 40% over the past 12 months, reflecting investor enthusiasm for AI-linked optical component makers. Rivals Zhongji Innolight and Eoptolink Technology, which also supply high-speed optical modules to hyperscale data center operators, are expected to report earnings in the coming weeks, providing further insight into the sector's growth trajectory.
This article is for informational purposes only and does not constitute investment advice.
