Tongtech Photonics Reports H1 EPS of NT$0.27, Turns Profitable on Recovering Optical Communication Demand

Tongtech Photonics (6588-TW), a manufacturer of optical filter chips for telecommunications, released its unaudited financial results for the first half of 2026 today (10th), reporting a net profit of NT$9.21 million, a turnaround from the loss recorded in the same period of 2025. Earnings per share (EPS) stood at NT$0.27. The company attributed the improvement to optimized product mix, increased capacity utilization, and recovering demand in the optical communications market, which collectively strengthened its operational momentum and reversed last year's losses.

Tongtech Photonics achieved profitability in the first half of the year. Consolidated revenue reached NT$183 million, a year-on-year increase of 132.45%. Net profit turned positive compared to the same period last year. Gross margin improved significantly from negative territory to 29.94%. Operating margin reached 4.9% and net margin 5.01%, both turning positive from last year's negative figures, marking a strong 'triple-margin improvement'.

The company stated that rising demand for telecom-grade filter chips, coupled with expanded shipment volumes, led to higher overall capacity utilization in the first half, significantly improving the gross profit structure. As operations scaled up, cost controls also proved effective. Operating expense ratio dropped to 25.04% in H1, a decrease of 19.38 percentage points year-on-year. The simultaneous improvement in gross profit and cost efficiency has strengthened the company's financial health and significantly boosted profitability.

Tongtech Photonics primarily produces optical thin-film filter chips, categorized by end application into 'Telecom Filters' and 'Datacom Filters'—both core areas in optical communications where the company has long-standing expertise. In 2026, demand for optical communications has clearly rebounded, driven by AI infrastructure and cloud computing. Shipments of telecom filters more than doubled compared to the same period last year.

Shipments of high-speed WDM filters used in 400G and 800G optical modules and data center transmission architectures also grew by nearly 50%. Both application segments are showing positive growth trends. The company will continue to optimize its product portfolio to enhance overall revenue and profit contribution.

Looking ahead to the second half, Tongtech Photonics noted that the optical communications market has clearly warmed up. Demand for high-speed optical transmission, driven by AI and cloud computing, continues to grow. Customer inventory adjustments have largely concluded, and overall market momentum is steadily recovering. The company will continue to strengthen its product mix and technological capabilities to capture growth opportunities in the high-speed optical communications market.

Additionally, to meet rising customer demand, the company is actively expanding production capacity and improving manufacturing efficiency. Resources are being focused on higher-value-added products to enhance profitability. Products targeting 800G and 1.6T long-haul, high-speed applications are undergoing customer validation and mass production ramp-up. The timeline for meaningful contribution will depend on customer certification progress. The company will adjust capacity planning and product allocation based on market demand to maintain competitiveness and growth momentum.