①Recent positive developments in the AI industry chain have come one after another, with the optical module index hitting a new high once again; ②Zhongji Xuchuang, New Easyshine, and Tianfu Communication have repeatedly set new highs in their stock prices this year, all entering the ranks of companies with a market capitalization of over 100 billion yuan; ③Deciphering the rise of the 'Three Musketeers' of optical modules.
Cailian Press News on December 14 (Editor Lichen) Recently, positive developments in the AI industry chain have emerged in rapid succession. Google’s new model has achieved a leapfrog improvement in performance, with its TPU computing power showing outstanding results. The official release of DeepSeek-V3.2, followed by Amazon’s Trainium3, further ignited market enthusiasm, while NVIDIA, Alibaba, AMD, and other leading industry players collectively denied the AI bubble theory, providing a strong boost to the steady development of this sector.
Benefiting from the explosive expansion of AI computing power, optical modules, as the 'core link' for AI computing transmission, have driven the sustained growth of the A-share optical module sector. The concept of optical modules has recently gained traction again. Wind data shows that the optical module (CPO) index hit a new high on Friday. Meanwhile, the famous 'Three Musketeers' of A-share optical modules—Zhongji Xuchuang, New Easyshine, and Tianfu Communication—all reached new highs in their stock prices this year and were humorously nicknamed 'Easy Zhongtian' by retail investors. As of Friday's closing, the market capitalizations of Zhongji Xuchuang, New Easyshine, and Tianfu Communication stood at 646.7 billion yuan, 425.4 billion yuan, and 167.3 billion yuan, respectively, all surpassing the 100-billion-yuan threshold. This fully demonstrates the high level of prosperity in the optical module sector driven by AI computing power. Institutions noted that, driven by AI computing demand, the global optical module industry is accelerating its upgrade to 800G/1.6T.
Google's entry into the TPU market has driven the chip platform to diversify from GPUs to ASICs, directly increasing the demand for optical modules. Coupled with the limitation of single-chip computing power, the dependence on optical modules for multi-chip interconnection has significantly risen. Previously, the market expected the volume of 1.6T optical modules to be led by NVIDIA's next-generation GPU. However, Google’s aggressive expansion of TPUs and the full deployment of 1.6T optical modules in TPUv7 have brought forward and solidified the demand for this product, also driving the valuation system of optical module stocks, represented by 'Easy Zhongtian,' to shift towards 2027 profits. According to Wind's consensus forecast, in 2027, Zhongji Xuchuang, Tianfu Communication, and New Easyshine are expected to achieve attributable net profits of 25.12 billion yuan, 3.873 billion yuan, and 20.67 billion yuan, respectively, corresponding to price-to-earnings ratios of 25.75, 43.19, and 20.58. However, industry insiders noted that the influx of participants in the high-speed optical module market has intensified competition, and the looming threat of price wars continues to erode profit margins. If companies fail to accurately grasp the technological direction, existing production capacity and technology reserves may face the risk of being disrupted. Moreover, current stock prices have already partially priced in future growth expectations, and any subsequent underperformance may trigger a valuation correction.
The Rise Code of the 'Three Musketeers' of Optical Modules: A 2.8 Billion Yuan Acquisition Propels Zhongji Xuchuang to a Market Capitalization of 640 Billion Yuan, While New Easyshine and Tianfu Communication Rely on Technological 'Turnaround.'
Three distinct entrepreneurial paths ultimately converged in the surging wave of the AI computing era. Zhongji Xuchuang completed a stunning transformation from traditional manufacturing to becoming a global leader in optical modules through an audacious cross-border acquisition. New Easyshine achieved a 'turnaround' by leveraging technological differentiation and precise strategic positioning, while Tianfu Communication built a formidable barrier in upstream components. Although these three enterprises started from different tracks and adopted varied approaches—breaking through via capital operations, technological innovation, or supply chain positioning—they all precisely captured the opportunities presented by the AI computing explosion, excelling in the optical module sector with their respective core competencies and collectively writing a legendary growth story for A-share tech companies.
In 1987, Longkou City Zhenhua Electrician Special Equipment Factory quietly opened its doors on the Shandong Peninsula, marking the precursor to Zhongji Xuchuang. By 2012, it was listed on the ChiNext Board of the Shenzhen Stock Exchange under the name 'Shandong Zhongji Equipment' with an issue price of 20 yuan. At that time, China's manufacturing industry was still positioned in the lower-to-middle end of the value chain, constrained by the low valuation bottleneck of manufacturing. Its market capitalization remained subdued, and annual revenue hovered around 200 million yuan. Over nearly three decades, it grew into a manufacturing leader in a niche field but remained trapped under the revenue ceiling of traditional manufacturing.
A bold cross-border acquisition marked the turning point in its fate. In 2017, Zhongji Equipment spent 2.8 billion yuan to acquire 100% of Suzhou Xuchuang’s equity. Founded in 2008 by Liu Sheng and other Chinese-American PhDs, Suzhou Xuchuang was one of the earliest companies in China to focus on optical communication modules and had successfully entered the supply chains of giants like Google and Amazon, with Google accounting for 23% of its sales revenue in 2016. Faced with obstacles in overseas listings, Suzhou Xuchuang urgently needed access to development funds via a publicly listed platform. After the completion of this acquisition, 'Zhongji Equipment' officially changed its name to 'Zhongji Xuchuang.' By 2021, Zhongji Xuchuang transferred its original motor manufacturing business to its controlling shareholder, Zhongji Holdings, retaining only Suzhou Xuchuang’s optical communication module business, completing a full transition from traditional equipment manufacturing to high-end communication equipment manufacturing.
In 2019, Zhongji Xuchuang, with years of experience in the optical module field, accurately seized the historical opportunity presented by the global commercial launch of 5G and the 400G upgrade of data centers. Combined with the industry tailwinds of telecom market expansion and rebounding operator capital expenditure following the issuance of China's 5G licenses, it entered a period of explosive growth driven by technological and performance resonance. From mass-producing 400G optical modules in 2018, launching the first 800G in 2020, acquiring Chengdu Chuhan Technology the same year to strengthen its position in the telecom market, forming a dual-pillar business structure in 'data communication + telecom,' to launching ultra-high-speed 1.6T optical modules in 2023, it completed a leap from a technological follower to a global market share leader within five years. In 2023, with the advent of the AI computing revolution, Zhongji Xuchuang saw significant quarterly growth in product orders and shipments, propelling a surge in performance.
In 2024, Zhongji Xuchuang’s shipment share of 800G optical modules exceeded 40% globally, firmly securing the top position worldwide. This achievement not only underscores its dominant position in the high-end market but also stems from its near one-year lead in technological iteration compared to the industry average. While the industry was still digesting 400G, Zhongji Xuchuang had already launched and mass-produced 800G pluggable high-performance optical modules, laying the foundation for subsequent leaps in global market share. Further analysis reveals that this success is mainly due to Zhongji Xuchuang’s forward-looking strategic layout in technological innovation and capacity expansion. It successfully overcame key technologies such as silicon photonics integration and coherent detection early on and established smart manufacturing bases globally (Suzhou, Chengdu, USA). Additionally, its 1.6T optical modules began large-scale production in 2025, maintaining a nearly one-year technological lead over the North American market. Riding the AI wave, Zhongji Xuchuang’s market capitalization surged from approximately 21.3 billion yuan at the beginning of 2023 to 646.7 billion yuan today, ranking second on the ChiNext Board.
The development history of Eoptolink Technology is akin to a 'dark horse' in the optical module industry. What is little known is that Eoptolink started as an ordinary agent. The entrepreneurial journey of Eoptolink's founder, Gao Guangrong, began in 1998 with the establishment of Guangtong Electronics, initially focusing on the agency sales of optical communication equipment at the lower end of the industrial chain. In 2004, they co-founded Guangsheng Communications, initiating exploration into moving up the industrial chain; in 2008, through mergers and reorganization, Eoptolink was formally established, completing its transformation from a trader to a manufacturer. During the peak period of domestic 4G construction from 2011 to 2015, the company achieved initial technological and capital accumulation with its 2.5G/10G optical modules, although its products were mainly mid-to-low-speed ones, resulting in limited market competitiveness. After going public on the Growth Enterprise Market in 2016, it raised 320 million yuan to invest in high-speed optical module production lines. However, at that time, its global market share was less than 3%, showing a clear gap compared to industry leaders.
From 2018 to 2019, Eoptolink Technology reached a critical strategic turning point. Based on their forward-looking judgment of cloud computing trends, Gao Guangrong’s team decided to focus R&D resources on 100G/400G data communication products. This decision came at an opportune moment as global cloud vendors’ capital expenditures entered an upward cycle after 2020, with giants such as Amazon and Microsoft expanding data centers. With early product line positioning, the company successfully transitioned from being telecom-focused to becoming data-communication oriented. However, during Eoptolink’s rapid development, Gao Guangrong also crossed regulatory red lines. In December 2024, Gao Guangrong was investigated for alleged violations involving stock transfers. At the beginning of this year, Gao Guangrong had illegal gains of 9.4986 million yuan confiscated and was fined 22 million yuan by regulators. Despite the shadow cast over the company due to the founder's legal issues, Eoptolink’s pace of technological breakthroughs did not slow down. The core driver of Eoptolink's explosive growth in recent years has been its technological leadership in high-speed products.
In terms of technology and capacity layout, Eoptolink demonstrates foresight: currently, the 800G optical module has become the main driver of Eoptolink's current performance growth. In the second half of 2024, Eoptolink’s 800G products began scaling up significantly, and by 2025, they have become an important pillar of revenue. More notably, Eoptolink has made substantial progress in the layout of next-generation 1.6T optical modules. The company launched its 1.6T product as early as during OFC 2023. On December 4, Eoptolink stated on Interactive Easy that it expects the 1.6T product to continue ramping up from Q4 this year to next year. It is understood that Eoptolink’s 1.6T product covers all technical routes, including VCSEL/EML, silicon photonics, and thin-film lithium niobate, offering significant advantages in performance and power consumption. This “not putting all eggs in one basket” strategy effectively reduces the risks associated with choosing a specific technical route. In the field of Co-Packaged Optics (CPO) technology, which represents the future of the industry, Eoptolink has also prepared ahead of time. Starting with the investment in Alpine in 2017, Eoptolink laid the foundation for silicon photonics technology, paving the way for CPO research and development. As a potential solution to meet high bandwidth and low power consumption requirements, CPO holds long-term strategic significance.
The three leading companies each have their own winning strategies. Although TFC Communication’s revenue scale and growth rate do not match the first two companies, its gross margin exceeding 50% is unmatched by the other two. In 2005, Zou Zhinong, who majored in mechanical design, founded TFC Communication in Suzhou, targeting ceramic ferrules—a core component of optical communication monopolized by Japanese enterprises. At that time, this key interface component required expensive imports domestically, posing supply risks. Zou Zhinong's team was determined to achieve self-sufficiency. Facing the stringent challenges of nanoscale ceramic sintering processes, they underwent countless trials and errors, repeatedly adjusting within the temperature range of 1200℃–1350℃, fine-tuning the raw material ratio to one ten-thousandth, and eventually developed a unique process that not only solved cracking and uneven density problems but also reduced costs by 30%. This breakthrough successfully replaced imports, rewrote the industry landscape, and laid the foundation for China’s self-sufficiency in optical communication components. In 2010, Zou Zhinong returned to his hometown Gaoyan with technical experience to produce core technologies, embarking on a journey of “technological feedback to his homeland.” In 2015, TFC Communication went public on the Shenzhen Stock Exchange, later acquiring precision optical lens technology through purchasing a Japanese company in 2016, acquiring AWG production lines in 2018, and obtaining advanced optical coating technology by acquiring Arctic Photonics in 2020, transforming from a single vendor into a comprehensive optoelectronic device service provider.
TFC Communication’s core strength stems from its 'vertical integration' model covering the entire industrial chain from basic materials to packaging and testing processes, enabling its high-speed optical engines to cost 15-20% less than competitors. Early on, more than 85% of TFC Communication’s revenue came from passive devices like ceramic ferrules and fiber optic adapters. With the surge in AI-driven high-speed optical interconnection demands, the company decisively extended into active device fields, successfully forming a dual-driven pattern of “passive + active” devices. Meanwhile, TFC Communication proactively laid out plans for next-generation CPO technology, developing core components and delivering samples smoothly. Positioning itself as a “supporting role” providing fundamental optical packaging services adaptable to various vendors’ technical routes, TFC Communication accurately meets the high standards of 800G/1.6T optical modules under the trend of “light advancing, copper retreating.” This opportunity stems primarily from the explosive demand for AI computing power. Leveraging its technological and model advantages, TFC Communication ultimately became the “invisible infrastructure builder” behind AI computing power connectivity.
