Value Investing: Latest Industry Research Report – Largan (3008-TW) Smartphone Peak Season Heats Up, Co-Packaged Optics Open New Growth Path

Largan (3008-TW) saw a clear recovery in revenue in July, with August entering the main shipment phase for new models from U.S.-based smartphone brands. As its core smartphone lens business accelerates once again, the company is also transferring its years of accumulated expertise in precision alignment, automation, and optical manufacturing into co-packaged optics (CPO). This research focuses directly on two key questions: how much growth the peak season will bring to the core business, and when the new venture will transition from sample delivery to mass production.

In July, consolidated revenue reached NT$4.877 billion, up 31.4% month-on-month but down 10.7% year-on-year, marking the highest level since April this year. Cumulative revenue for the first seven months totaled NT$34.086 billion, up 7.5% year-on-year. The company stated that shipment momentum in August would be even stronger than in July. In terms of product mix for July, 10-million-pixel lenses accounted for 60–70% of revenue, while products exceeding 20-million pixels contributed 10–20%, indicating that peak season demand has already started to reflect in sales.

Smartphone lenses remain Largan’s (3008-TW) most important source of profit at this stage. Third-quarter new model specifications are driving demand for high-end lenses, with periscope lenses, variable apertures, and higher-precision multi-lens designs continuously increasing manufacturing complexity. Largan’s advantage lies not only in the lenses themselves but also in its internal mastery of molds, processes, automation equipment, and yield control. When customers’ new models enter mass production, this integrated capability directly translates into faster delivery speeds and flexible product configurations.

Second-quarter revenue reached NT$13.665 billion, with first-half revenue totaling NT$29.209 billion, up 11.3% year-on-year. First-half earnings per share were NT$82.35. Financial institutions estimate third-quarter revenue will significantly exceed the second quarter, with the majority of incremental growth concentrated in August and September. While yield ramp-up during initial mass production can temporarily pressure profitability, the third quarter remains the critical period for the company’s full-year operational recovery as shipment volumes scale up.

Co-packaged optics (CPO) represents Largan’s (3008-TW) most concrete new direction beyond smartphone lenses. With the rapid increase in data exchange volume in AI servers, optical signals must accurately enter and exit silicon photonic chips, requiring extremely low alignment errors between optical fibers and micro-lenses. Largan has transferred its precision alignment capabilities developed in smartphone lenses to optical fiber arrays. Currently, internal process precision has reached the 0.3-micron level, an advantage that directly addresses customers’ most challenging issue: coupling efficiency.

The company has already obtained formal specifications from a volume-production client, and optical fiber array samples were submitted for certification in July. The first automated pilot production line is scheduled to be ready by the end of the third quarter. Once certification is passed, equipment can be replicated based on the same design, with revenue potentially starting as early as mid-2027. Initially, the company will supply optical fiber array components, later extending to integrated modules combining micro-lens arrays, thereby increasing the value per unit.

Recently, the market has discussed glass bridge solutions, but Largan is pursuing a different optical coupling path. The company integrates prisms, collimator lenses, and multi-channel micro-lenses, combined with high-precision optical fiber arrays, aiming to improve the efficiency of optical signals entering and exiting chips. Multiple CPO architectures still coexist, but Largan has already sent its products to volume-production clients for validation. The next key observation points are whether the pilot line will be completed on schedule by the end of the third quarter and the speed of capacity expansion following customer certification.

The quantum industry offers longer-term potential. Photonic quantum computing and quantum communication require stable lasers, precise optical coupling, and ultra-low-error optical path control—areas where Largan’s (3008-TW) laser components, micro-optics, and precision alignment technologies position it well for entry. Currently, this remains focused on technological positioning. Near-term revenue will continue to rely on smartphone lenses, followed by CPO completing pilot and mass production, gradually expanding its growth scope from consumer electronics to AI data centers.