Zhongji Innolight to Acquire 10.47% Stake in Zhongshi Technology for RMB 1.747 Billion

Zhongji Innolight announced plans to acquire a 10.47% stake in Zhongshi Technology for RMB 1.747 billion through a negotiated transfer, marking the latest case of an optical module company expanding into the upstream of the industry chain. The transaction was disclosed in August 2026, with specific delivery arrangements yet to be announced.

The optical communications industry is generally accelerating its upstream expansion along the industrial route of optical components, optical chips, epitaxial wafers, substrate materials, and high-purity metal raw materials. Demand for optical modules from AI computing centers is growing rapidly, and technology iteration is accelerating, making optical chips a capacity bottleneck in the industry chain and a direct determinant of optical module performance. The core of upstream expansion lies in securing chip capacity and shortening development cycles to ensure delivery capability.

As optical modules iterate toward 800G, 1.6T, and even 3.2T, the cost share of optical chips is rising rapidly, with profits concentrating in the midstream chip segment of the industry chain. Some companies are adopting the IDM model, integrating design, manufacturing, and packaging to address changes in cost structure. Industry data shows that the share of optical chips in total costs rises significantly with each generational upgrade, a trend driving more companies to adjust their supply chain layouts.