Zhongji Innolight Cites Tight Material Supply, Modest Price Hikes, Plans Cost Controls
Zhongji Innolight said on an August 23 conference call that material supply remains tight as downstream demand growth outpaces upstream capacity expansion. Some materials have seen price increases, though rises are modest for high-volume products due to locked-in contracts and large order sizes. The company described product price declines as rational and plans to control costs through silicon photonics adoption, yield improvements, and new product ramp-up in 2027 to support gross margins.
Zhongji Innolight said on an August 23 conference call that material supply is currently tight, mainly because downstream demand is growing too quickly while upstream capacity expansion has been slow. Some materials have indeed seen price increases, but the price rises for products with large supply volumes are not significant, mainly because the company has locked in strong contracts and holds large order volumes, giving it a pricing advantage.
Regarding subsequent customer deliveries, the company said product price declines are relatively rational. It plans to control costs and improve overall gross margins through technical measures, including the silicon photonics ratio and yield improvements, as well as the ramp-up of new products in 2027.
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