GlobalWafers-KY Reports Strong First-Nine-Month Earnings and Sees Growth Continuing
Table of Contents
You might want to know
- How did stronger AOC shipments help GlobalWafers-KY return to profitability?
- What are the company’s expectations for the fourth quarter and 2027 amid supply constraints for indium phosphide substrates?
Main Topic
Compound-semiconductor and optical-communications company GlobalWafers-KY (環宇-KY, 4991-TW) held an investor conference on the 3rd and released its financial results for the third quarter of 2026. The company reported a sharp improvement in profitability, supported by a strong recovery in shipments of its own-brand active optical cable (AOC) components. AOC’s share of revenue rose from 61% to 71%, helping lift quarterly net income and earnings per share. For the first three quarters of the year, earnings per share (EPS) reached 3.91 yuan.
Third-quarter revenue totaled 8.45億元, up 9.7% quarter over quarter and 55.4% year over year. The principal contributor to that growth was an increase in AOC shipments. Gross margin was 47%, up 3.7 percentage points from the previous quarter and broadly in line with the 47.4% recorded in the same period a year earlier. Operating margin was 19.3%, rising 65.9% quarter over quarter and 56.1% year over year.
Net income attributable to the parent company was 1.59億元 for the quarter, a 44.5% increase from the previous quarter and more than 10.3 times the year-earlier level. Cumulative net income for the first three quarters was 4.65億元, and EPS was 3.91 yuan. That performance marked a turnaround from the net loss of 1.45 yuan reported for the comparable period last year. The company’s improving results were closely associated with AOC’s rising contribution to revenue, which reached 71% in the third quarter.
GlobalWafers-KY Chief Executive Officer and President Bao-Xin An said that the higher proportion of AOC products—up approximately 10% quarter over quarter—contributed to both better gross margin and stronger business growth. Demand from AI data centers (AI DCs), alongside foundry activity in radio-frequency (RF) components, also supported AOC revenue growth. The company’s results therefore reflect a combination of product mix, end-market demand, and manufacturing-related business.
Supply conditions for indium phosphide (InP) substrates and epitaxial materials also improved, allowing shipments to rise significantly. At the same time, the company increased AOC prices to reflect higher raw-material costs. Lower inventory write-down losses further supported gross margin. These factors helped offset weaker revenue in certain other segments: RF wafer foundry revenue declined 7.6% quarter over quarter, while optoelectronic wafer foundry revenue fell 37% quarter over quarter. GlobalWafers-KY said it adjusted its order-taking strategy to focus on shipments for important customers.
For the fourth quarter, company estimates cited by market participants put revenue at US$30 million to US$34 million (approximately NT$952 million to NT$1.079 billion). This would represent quarter-over-quarter growth potentially reaching double digits. Gross margin is expected to remain at a high level of 46% to 50%. Operating expenses, however, are expected to rise to US$7.6 million to US$8.6 million. The increase is partly related to the delayed development schedule for CW Laser, with the associated amortization expenses expected to begin being recognized from the fourth quarter.
Management expects AOC demand to remain strong. In addition, investment affiliate Siwei Lifu (資威利富) has secured additional capacity, which is expected to help sustain robust shipment capability. At the materials level, GlobalWafers-KY expects InP substrate prices to continue rising while supply remains tight. The company noted that supply conditions are significantly affected by political factors between the United States and China. It and its partners are responding with a rapid-shipment strategy.
Supply arrangements differ by year. The company has secured its 2027 supply through long-term agreements, while negotiations for 2028 are still ongoing. Management expects current substrate availability to support smooth shipments through 2027. This provides a degree of visibility for near-term production, although continued price increases and tight supply remain relevant risks to monitor.
The company also sees a supportive outlook for the broader optical-communications market following Marvell’s acquisition of optical-communications company Lumentum. GlobalWafers-KY said it currently has no material supply concerns regarding substrate materials and expects shipments to proceed smoothly through 2027. An said he expects operations to continue growing in the fourth quarter and in 2027.
Market participants likewise maintain a view of stable growth for the company in both the current year and the following year. In the 200G photodetector (PD) product line, the company is responding to capacity risks among non-Chinese substrate suppliers by introducing a second substrate source. That additional source is expected to enable a significant increase in shipments in the second quarter of 2027. The second-source plan is intended to reduce dependence on a constrained supply channel and support future growth in 200G PD products.
Overall, the reported quarter combined higher AOC shipments and a more favorable product mix with improved availability of certain materials. Revenue growth was accompanied by a return to profitability for the first nine months, while management’s outlook points to further expansion in the fourth quarter and 2027. However, the company’s ability to meet demand will continue to depend in part on substrate supply, pricing, and the progress of sourcing diversification.
Key Insights Table
| Aspect | Description |
|---|---|
| Third-quarter revenue | 8.45億元, up 9.7% quarter over quarter and 55.4% year over year, mainly on stronger AOC shipments. |
| Profitability | Quarterly net income attributable to the parent company was 1.59億元; first-three-quarter EPS reached 3.91 yuan. |
| AOC contribution | AOC revenue share increased from 61% to 71%, supporting growth and gross margin. |
| Fourth-quarter outlook | Revenue is estimated at US$30 million to US$34 million, with gross margin expected at 46% to 50%. |
| Substrate supply | The company has long-term agreements for 2027 supply; negotiations for 2028 remain underway. |
| 200G PD products | A second substrate supplier is being introduced, with significant shipment growth expected in the second quarter of 2027. |
Afterwards...
GlobalWafers-KY enters the coming periods with stronger AOC demand, improved first-nine-month profitability, and a stated expectation of continued growth in the fourth quarter and 2027. Its outlook will depend not only on market demand, particularly from AI data centers and optical communications, but also on its ability to manage rising InP substrate costs and supply constraints. The planned addition of a second substrate source for 200G PD products and the long-term agreements covering 2027 supply are important steps in that effort. Progress on the 2028 negotiations, the CW Laser development schedule, and the company’s ability to sustain margins will remain key points to watch.
Last edited at：2026/11/3
