HGTECH disclosed a record of investor-relations activities on 30 October. Revenue for the first three quarters of 2026 reached RMB 12.654 billion, up 15% year on year, while net profit attributable to the parent reached RMB 1.666 billion, up 26%. The company is pursuing breakthroughs in core technologies across optical interconnects, intelligent sensing and intelligent manufacturing, serving domestic and international markets with a focus on the foundations of AI and the digital and intelligent transformation of industry.
Optical interconnects lead growth across three businesses
The optical interconnect business generated revenue of RMB 6.539 billion in the first three quarters, up 26%, and net profit of RMB 566 million, up 30%. Third-quarter net profit was RMB 290 million, an increase of 201% from the preceding quarter. HGTECH said it had achieved leading-scale deliveries of 800G silicon-photonics LPO products and 1.6T optical modules, with rising orders driving domestic and international growth. Its 1.6T FRO/LRO products were undergoing tests at leading overseas AI companies. The company has also positioned its development activities in 3.2T, 6.4T and even 12.8T XPO technologies. Volume deliveries of higher-value products, including 800G LPO and 1.6T modules, helped optical-module exports to North America and Southeast Asia grow 396% in the first nine months.
Intelligent manufacturing recorded revenue of RMB 3.010 billion, up 13%, and net profit of RMB 399 million, up 22%. The macroprocessing business focused on new energy and intelligent manufacturing, with five industries, including new-energy vehicles and shipbuilding, accounting for 89% of orders. Microprocessing continued its shift towards industry-specific products, with clear growth in revenue and profit. The 3DP additive manufacturing business expanded its customer base from computers, communications and consumer electronics to AI. Green intelligent agricultural machinery secured initial small-batch orders, while orders for high-speed connector equipment and optical-module manufacturing solutions increased markedly. Consumer-electronics applications extended into advanced packaging; automated hydrogen electrolyser production lines achieved an overseas-market breakthrough; and semiconductor activities advanced the development of precision welding equipment for probe cards.
Intelligent sensing generated revenue of RMB 2.934 billion, up 3%, and net profit of RMB 292 million, down 37%, although the decline in net profit narrowed compared with the first-half result. The business is moving from single-function temperature sensing towards multidimensional integrated intelligent sensing solutions. Its three main markets—smart homes, new-energy vehicles, and photovoltaic and energy storage applications—continue to develop. China’s new-energy and intelligent connected vehicle industries remain in a period of structural adjustment. HGTECH said its early positioning in photovoltaics, energy storage and data centres was deepening and that operating quality was beginning to improve despite short-term pressure.
Research and development investment reached RMB 938 million during the reporting period, up 25.8%. The company participated in establishing the Optics Valley intelligent sensing technology innovation research institute and signed a strategic cooperation agreement with Huazhong University of Science and Technology. The agreement covers a joint optoelectronic chemicals research centre, a joint research centre for micro/nanophotonic devices and high-speed optical interconnects, and a joint laboratory for advanced laser metal additive manufacturing. Overseas revenue reached RMB 2.827 billion in the first nine months, accounting for 22% of total revenue and doubling from a year earlier, mainly through growth in North America, Europe and Southeast Asia.
Multiple measures address structural supply constraints
During the question-and-answer session, HGTECH said the industry was developing rapidly, with overall demand exceeding supply and structural shortages affecting upstream materials. High-end digital signal processors (DSPs) were the principal bottleneck, particularly devices based on advanced 3 nm and 5 nm processes. Basic materials such as printed circuit boards were also tight. Demand for passive components, including isolators, could be met by securing orders at source. Light-source chips were both internally developed and externally purchased; Yunling Optoelectronics’ optical chips and continuous-wave light sources had entered volume production and batch deliveries.
The company outlined several responses. It had secured substantial material supplies through long-term orders and other arrangements, with commitments worth more than US$1 billion. End-customer support had helped DSP arrivals improve significantly compared with the second quarter. HGTECH was diversifying supply arrangements by qualifying and introducing multiple brands for LPO, LRO and partial-DSP solutions overseas. It was also accelerating domestic substitution by testing and introducing Chinese DSPs in its domestic computing-infrastructure construction business. The company expected domestically produced DSPs to account for a substantially larger proportion of its domestic deliveries in the following year.
North American orders and capacity plans
HGTECH said optical interconnect revenue in North America and Southeast Asia had grown rapidly during the year, and it expected a relatively clear increase in overseas business and a substantial expansion in overall scale in the following year. Higher-volume deliveries of 800G LPO products began in the second half. The Thailand factory was shipping approximately 100,000 units per month, backed by long-term contracts, and the company expected 800G LPO deliveries of 1.2–1.5 million units in the following year. Its 1.6T LPO products were being submitted rapidly for testing, which it expected to finish in the first quarter. Indicated demand for the following year was 1–2 million units, with potential for further increases. Tight capacity at mainstream DSP suppliers was encouraging customers to diversify solutions. FRO, LRO and other products were undergoing intensive sample testing, with some customers expected to complete qualification and place orders in the following year’s first quarter.
In China, HGTECH was advancing iterative product testing and expected domestic cloud operators’ incremental demand for 800G and 1.6T optical modules to exceed 50% in the following year. It anticipated rapid demand growth from some second-tier cloud companies, with support for gross margins. In computing-infrastructure construction, the company linked faster deployment of inference computing to domestic-market access to NVIDIA’s “5500” offering, as identified in its update. It was qualifying and securing Chinese DSP supplies to meet additional demand for 400G and 800G modules, and described the business’s overall gross margins as relatively high. It also expected domestic optical-module prices to recover and domestic gross margins to improve further.
For capacity, the Wuhan site was expected to develop monthly shipping capability of 800,000–1 million 800G units in the following year. Capacity for 400G products was planned to rise 30% to 500,000–600,000 units per month, while domestic 1.6T capacity was to remain at 150,000–200,000 units per month. Overseas factories were producing approximately 200,000 units per month, mainly LPO with some FRO shipments. Overseas capacity was expected to reach 400,000–500,000 units per month in the second quarter of the following year and exceed one million in the third quarter. Around 300,000 units per month could be allocated to 800G LPO and FRO products, with the remaining capacity used for the progressive ramp-up of 1.6T products during the second and third quarters.
Progress in NPO and intelligent-manufacturing microprocessing
HGTECH said its near-packaged optics (NPO) business was progressing well. It had qualified as a 6.4T NPO supplier to a well-known North American customer, completed the product design and begun advancing sample testing, with volume deliveries expected in July of the following year. NPO products were currently mainly customer-specific, with clear demand indications. The company expected standards to emerge progressively without preventing commercial deployment. It intended to increase R&D investment, use 6.4T NPO to develop product and process experience, and extend that capability to 3.2T NPO to meet domestic cloud customers’ requirements.
In intelligent-manufacturing microprocessing, the company was targeting opportunities in AI computing hardware by building integrated laser equipment and automated production-line solutions for optical modules, high-speed connectors, DC/AC power supplies, liquid cooling and high-density glass storage disks. For optical modules, it had introduced COB packaging and coupling, COB assembly, die-bonding equipment, automated optical inspection equipment and intelligent automated lines, with batch deliveries already achieved. For high-speed AI computing connectors, it offered laser wire stripping, laser welding of terminals and shielding covers, and high-speed inspection of high-density pins. It had supplied leading DC/AC power customers with welding and inspection equipment and automated lines, and delivered laser cutting, welding equipment and automated lines to leading liquid-cooling customers. For glass storage disks, it had supplied a leading global customer with high-precision glass cutting and dry laser precision-chamfering equipment.
3D printing expands into AI computing as sensing pursues lower costs
In 3D printing, HGTECH had obtained equipment qualification from a leading consumer-electronics customer. Phone-related printing equipment and supporting systems were undergoing process validation, while watch projects were also in testing. Two additional leading overseas customers had received batch shipments, and the business had begun technical engagement and new-product validation with several major Chinese consumer-electronics brands. In AI computing, it had supplied small batches of liquid-cooling plates, copper-alloy optical-module heat sinks and server thermal-management structures to leading customers. More than ten process-finalisation and project-validation initiatives were being prioritised in the fourth quarter. Describing 2026 as the first year of business deliveries, the company said investment was focused on R&D and production capacity. For 2027, it planned to focus on AI computing, consumer electronics and robotics, improving additive manufacturing equipment and automated-line capabilities to scale multi-material production and achieve substantial revenue growth.
To improve intelligent sensing gross margins, HGTECH planned to concentrate on higher-margin new products, accelerate gas sensors and integrated thermal-management modules, and bring nominated commercial-vehicle, construction-machinery, energy-storage and automotive projects into volume production. It also intended to expand into AI and liquid cooling and convert overseas orders into scaled deliveries. Operational measures included applying AI throughout production and internal management, reducing inventories, controlling expenses and lowering costs through design, supply-chain and platform changes. The company expected production ramp-ups to improve profit leverage. In 2027, increasing volumes in automotive, energy storage and strategic new products, together with a higher overseas revenue share, were expected to improve operating performance.