Yuanjie Technology: Next year, there will be a large gap in the optical chip market, and we will strive to find opportunities in the PCN window period

ICC News Recently, Yuanjie Technology held a performance exchange meeting for the third quarter of 2023. In the first three quarters of 2023, Yuanjie Technology's operating income was 93.1902 million yuan, a year-on-year decrease of 51.83%. net profit attributable to shareholders of listed companies was 21.4479 million yuan, a year-on-year decrease of 70.99%. In the third quarter of 2023, the operating income was 31.8711 million yuan, a year-on-year decrease of 54.88%. net profit attributable to shareholders of listed companies was 2.0568 million yuan, down 91.73% year-on-year. The gross profit margin for the third quarter of 2023 was 39.14%, a slight improvement from the second quarter.

In the first half of the year, the demand for optical fiber access, especially overseas demand, was weak, and the demand for data centers was relatively weak. Therefore, the company's revenue and profit in the first three quarters decreased compared with the same period last year, mainly due to the poor performance of optical chip demand in optical fiber access, data center and other markets, the reduction of procurement by downstream customers and the competition in the market of some products. At present, the market has a certain demand recovery, the company will always pay attention to the changes in market demand, on the basis of deep cultivation of the original product business, continue to increase the design, development and production of various types of EML optical chips at all rates.

The following is a summary of the main information of this performance exchange meeting:

Q: What are the specific circumstances and reasons for the recovery of downstream demand from optical chip manufacturers?

A: In terms of optical fiber access, the decline in the second quarter and the third quarter was larger. Especially in the North American market, some items have seen a large decline. At present, from the fourth quarter, order demand has begun to recover, and domestic demand has also recovered. In terms of data centers, the demand brought by AI is strong, and the company will continue to develop related products for it. In terms of the wireless market, there are no major changes at present, and demand should recover in the first half of next year.

Q: In the data center market, it is expected that 400G and 800G optical transceiver products will use a large number of optical chips next year What is the pace of CW light source products for EML and silicon photonics modules?

A: At 100G PAM4 In terms of EML products, the current product is in the testing stage of the client, but because the client has product certification and PCN window period, the end user has strict control over the PCN, so the test time is slightly longer. In terms of CW light sources, the company has prepared a variety of solutions, and there will be more opportunities for 400G and 800G optical transceiver products, and the company is also making every effort to promote cooperation with customers and end customers.

Q: Is the PCN window the same between CW light source and 100G EML products, and what is the difference?

Answer: In terms of CW light source, the product development progress of Yuanjie Technology is at the same stage as that of foreign manufacturers, and there is an opportunity to directly cut into the products of major customers in the future. at 100G PAM4 In terms of EML products, overseas suppliers already have mature products, and the company is testing them for launch this year. The PCN window depends on the end customer, and it is currently understood that there will be a large gap in the optical chip market next year, and the company is also striving to find opportunities in the window period.

Q: How do you plan your products for the next three years?

A: In terms of laser chip products, the company is also developing two products, 100G PAM4EML products and 200G PAM4 EML, 200G PAM4 EML R&D progress is in line with expectations.

In terms of CW light source products, early 50mW high-power silicon photonic laser products have been sold. At present, in terms of product research and development, 100mW high-power silicon photonic laser products can almost realize customized needs, and are gradually delivering volume to customers, and in-depth cooperation with high-quality enterprises is underway.

In terms of PON product line, the 50G PON EML laser and 25G PON EML laser developed by the company have carried out in-depth cooperation with customers, and are almost synchronized with international manufacturers.

In terms of wireless product lines, the market demand is 10G, 25G and 50G series DFB laser products, and the company has already delivered samples or shipped them. At the same time, in terms of strategic layout, the company will continue to deploy overseas markets and move towards internationalization in the future.

Q: Is there any forecast for the shipment of 10G PON 1577nm EML products in the first and second quarters of next year?

A: From the market perspective, it is expected that the demand for 10G PON next year will remain the same as this year. From the company's point of view, the company will continue to increase resource investment, and the product is expected to achieve rapid growth next year.

Q: Regarding the price of 100G EML optical chip products next year, if the price reduction is more next year, is it an opportunity for Yuanjie?

A: AI accelerates 100G The rapid ramp-up of EML products will also accelerate the price curve and life cycle iteration of products. In the high-end chip and overseas markets, it is mainly necessary to rely on word-of-mouth and steady products, not to penetrate the market by price reduction. Yuanjie has great advantages and confidence in R&D and manufacturing.

Q: Is there a bottleneck in the expansion of Yuanjie's fundraising projects? For example, the limit of equipment delivery time?

A: At present, the purchased equipment has been in place, and there is no restriction on the expansion of production, and the company is still continuing to purchase advanced manufacturing equipment to ensure competitiveness.

Q: At present, has Yuanjie considered setting up factories overseas, and has it promoted its work to become a global supplier?

Answer: Overseas factories ultimately depend on the customer, Yuanjie will carry out a long-term layout, careful evaluation. In particular, we will consider the international layout in R&D and customer service to meet the company's sustainable development, provide more convenient customer service, and become an international enterprise.