As AI data center deployments continue to accelerate, demand for high-speed optical interconnects has seen burgeoning growth, triggering a new wave of capacity expansion across the optical communications industry.

On June 16, Dongshan Precision (DSBJ) announced that its wholly owned subsidiary, Source Photonics Holdings (Cayman) Limited, and its affiliated entities will invest in optical chip and optical module expansion projects in Changzhou and other locations. The projects carry a total investment of USD 1.2 billion, funded entirely through the company’s own resources.

According to DSBJ, Source Photonics’ existing production capacity is no longer sufficient to meet long-term customer demand. The expansion will focus on increasing output of high-end optical chips and high-speed optical modules, including products for 800G and 1.6T AI server interconnect applications, while further strengthening the company’s vertically integrated capabilities in optical communications.

Source Photonics is one of the world’s leading optical communications suppliers, with operations spanning optical chip R&D, wafer manufacturing, packaging and testing, and optical module assembly. The company has established mass-production capabilities in EML lasers and high-speed optical modules, and its products have already shipped in volume to leading global cloud service providers and AI hardware vendors.

Notably, the Changzhou project is not DSBJ’s only investment in the optical communications sector recently. Earlier this month, the company announced plans to build high-speed optical module and co-packaged optics (CPO) production facilities in Suzhou, extending its presence into next-generation AI interconnect technologies.

With the launch of the Changzhou expansion, DSBJ is further strengthening its footprint across optical chips, high-speed optical modules, and CPO technologies, covering key segments from upstream core components to advanced packaging. Source Photonics currently operates manufacturing facilities in Taiwan, Jiangsu’s Jintan, and Chengdu, Sichuan, while a production base in Thailand is under construction, forming a multi-region manufacturing network to support global demand.

Following its consolidation into DSBJ financial statements in October 2025, Source Photonics has emerged as a major growth driver for the company. In 2025, the business accounted for 3.58% of DSBJ’s total revenue but contributed 22.69% of its profits. In the first quarter of 2026, its revenue contribution rose to 16.02%, while its share of profits climbed to 52.92%.

(Photo credit: Dongshan Precision)

TrendForce 2026 Infrared Sensing Application Market and Branding Strategies
Release: 01 January 2026
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