Value Investing: Latest Industry Research Report – HC SemiTek (4979-TW) Benefits from Strong US Optical Communications Earnings, Three Supply Lines Now Taking Over

This research on HC SemiTek (4979-TW) takes a different approach. We begin by dissecting the latest financial report of U.S. optical communications giant Lumentum (LITE), then cross-reference it with HC SemiTek’s long-haul data center interconnect optical modules, post-epitaxy processing for continuous wave lasers, and electric absorption modulated laser (EML) developments. The numbers from overseas giants reflect expanding overall demand—what truly matters is which products this demand flows through, and how much will translate into HC SemiTek’s revenue and profits.

Lumentum reported quarterly revenue of approximately $1.006 billion for the period ending June 2026, up 109% year-over-year. Adjusted EPS reached $3.23, surpassing market expectations on both revenue and profitability. The company forecasts next quarter’s revenue between $1.225 billion and $1.275 billion, with adjusted EPS estimated at $4.05 to $4.35. Shipments of 800G cloud optical modules hit record highs, 1.6T products have begun mass production, and demand for 100G and 200G electric absorption modulated lasers (EML) and continuous wave (CW) lasers remains strong. This earnings report confirms that optical interconnect upgrades in AI data centers continue to accelerate.

Let’s clarify the supply relationship. Publicly available information does not provide sufficient evidence that HC SemiTek directly supplies all the above products to Lumentum. Therefore, we cannot equate every dollar of Lumentum’s growth directly to HC SemiTek’s orders. Both companies operate within the same demand chain: 800G and 1.6T modules require more high-speed lasers; data center interconnections need long-haul optical modules; silicon photonics and co-packaged optics (CPO) require stable external light sources. Lumentum’s report validates end-market demand; how much HC SemiTek captures depends on customer qualifications, manufacturing share, and production capacity.

HC SemiTek’s most mature product currently is the 400G long-haul data center interconnect optical module, primarily used for connecting data centers tens to hundreds of kilometers apart. The company holds near-exclusive OEM roles for these products, with market estimates suggesting over 50% market share. Shipments to major North American cloud customers continue to grow. The 800G long-haul interconnect optical module has already passed certification with major North American cloud service providers and has begun limited shipments. Mass production is expected in the second half of the year. Due to initial inclusion of high-cost components, unit prices could reach several times that of 400G products, meaning revenue growth will outpace shipment volume.

The second growth line is continuous wave (CW) lasers. AI clusters exchange massive amounts of data between racks, requiring silicon photonic modules to have continuous, stable light sources. HC SemiTek handles the post-epitaxy manufacturing process, and its existing products have already been adopted by three cloud service providers. The company plans to double its monthly processing volume by the end of 2026 compared to the end of 2025, gradually shifting its processes from 2-inch to 3-inch and 4-inch wafers. Lumentum’s latest earnings highlight sustained high demand for CW lasers and optical components, indicating real market support for customer capacity expansion in this segment.

The third line is high-speed electric absorption modulated lasers (EML). HC SemiTek has secured backend module and packaging orders for EML components from a major U.S. networking giant and has established 100G and 200G production capacity. This component integrates laser and signal modulation, making it ideal for 800G and 1.6T long-distance high-speed transmission. With high manufacturing barriers and limited qualified global suppliers, this positions HC SemiTek favorably. New production capacity is being ramped up quarter by quarter this year. If stable mass production is achieved by year-end, the company’s role will evolve further—from module OEM and backend processing to becoming a supplier of high-speed laser components.

Latest revenue figures are already accelerating upward. HC SemiTek reported July revenue of NT$509 million, up approximately 11.8% month-over-month and 31.01% year-over-year, exceeding June’s NT$455 million. Cumulative revenue for the first seven months reached NT$2.991 billion, up 17.64% year-over-year. June’s monthly EPS was NT$0.44, with H1 cumulative EPS at NT$2.91. The 400G long-haul interconnect optical modules and CW lasers have provided a solid foundation. July revenue set a new annual high, indicating that product upgrades for the second half are already taking effect. Financial institutions initially projected 2026 revenue of around NT$6.392 billion, representing 45.77% year-over-year growth. The timing of 800G mass production and high-speed laser yield rates will determine subsequent growth momentum.

Lumentum has raised its next-quarter revenue guidance again, indicating that effective production capacity for 800G, 1.6T, high-speed EML, and CW lasers remains insufficient in the short term. For HC SemiTek, 400G long-haul interconnect optical modules represent current shipments, 800G products will drive second-half revenue growth, while CW lasers and high-speed EML will extend growth into 2027. Going forward, monitor three key metrics: 800G mass production value, monthly CW laser processing volume, and 200G high-speed laser shipments. If these three areas progress as planned, the positive impact from overseas optical communications earnings will truly materialize on the company’s financial statements. To know immediately which stocks to buy on dips, first join Professor Qinglong’s official LINE: search @ai8085 or click the link below. Free daily trading alerts are delivered during market hours, highlighting strong stocks to watch.

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Source: Analyst Tsai Ching-Lung – Moore Investment Advisory

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