KY-Eco Benefits from AI Optical Communication Demand and Improved InP Substrate Supply

KY-Eco (4991-TW), a compound semiconductor optical communication manufacturer, has seen its August revenue reach NT$2.62 billion, up 80.31% month-over-month and 45.62% year-over-year, driven by increasing demand for AI optical communication products and the resolution of InP substrate raw material shortages. Analysts expect that as the substrate supply situation improves, KY-Eco's current substrate supply capacity can support demand until the end of 2026, with performance expected to continue growing in 2026 and 2027.

According to industry sources, multiple compound semiconductor optical communication manufacturers have received their first batch of InP substrate raw materials by the end of May, with continued imports in July, alleviating supply shortages. KY-Eco's current supply capacity is expected to support demand until the end of this year, driving further expansion of PD (photodiode) product production.

KY-Eco's 200G PD has entered mass production and is expected to become a key growth driver next year. For laser products, the 70mW CW Laser has passed customer verification, while the 100mW product is undergoing customer-side reliability testing. Laser product performance is expected to gradually improve starting next year.

Foreign institutional reports indicate that KY-Eco stands to benefit from AI optical communication specification upgrades, with PD unit selling prices potentially growing 6-8 times, driving increased gross margins. Future shipments are expected to gradually increase, with EPS projected to grow steadily from 2026 to 2028, receiving a buy rating.