Over 1.2 billion, Dongshan Precision invests in optical module and CPO projects

Recently, the Yandu Ecological Environment Bureau of Yancheng City released two environmental impact reports for construction projects.

The report shows that Yancheng Dongshan Precision, a subsidiary of Dongshan Precision, plans to promote two major optical communication industry projects in Yandu District, Yancheng City, Jiangsu Province.

Specifically, the high-speed optical module device manufacturing technical transformation project has a total investment of 1 billion yuan and is located in Building 5, Yancheng Dongshan Precision Industrial Park, No. 999 Yandu Road, Yandu District. The original factory building was used for reconstruction, with a construction area of 14,900 square meters.

The project plans to produce 5 million high-speed optical module devices annually, using COB packaging technology. The product consists of core components such as substrate, upper cover, thermistor, Base, Fiber Lens, Bech, CoC, TEC and light engine.

The second project is a CPO technology product research and development and industrialization project with a total investment of 223 million yuan. It is located on the west side of the 3rd floor of Building 5 in the same industrial park, with a construction area of 7,500 square meters. The project focuses on cutting-edge CPO technology and plans to produce 4,800 CPO products annually.

Each CPO product is integrated with hundreds of optical modules. The core components include CPO substrate, chip, upper cover, thermistor, Base, Fiber Lens, Bech, COC, TEC and optical engine. It is mainly aimed at the next generation of high-speed optical interconnection application scenarios.

The two projects have a total construction area of 22,400 square meters and a total investment of more than 1.2 billion yuan, forming a two-wheel drive layout pattern of mass production of high-speed optical modules and industrialization of CPO technology.

Judging from the approval progress, the high-speed optical module project had previously obtained the registration certificate on April 2, 2026, and the CPO project had obtained the registration certificate on May 3, 2026. The environmental impact assessment documents of the two projects are currently in the approval and publicity stage.

It is also worth noting that Yancheng Dongshan Precision was previously mainly engaged in the manufacturing of glass panels, LED particles and LCM modules in Yancheng. However, due to market factors, all original production lines have been discontinued in November 2025.

In recent years, Dongshan Precision has accelerated its deployment of optical communications business. In June 2025, Dongshan Precision announced that it planned to acquire 100% of Source Photonics' shares at a transaction consideration of no more than US$629 million through its wholly-owned subsidiary, thereby entering the field of optical chips and optical modules and achieving vertical integration of the industry chain.

According to the annual report disclosed by Dongshan Precision in April 2026, its optical module business has contributed revenue of 1.436 billion yuan in a single quarter since it was included in the consolidated statements in the fourth quarter of 2025, with a gross profit margin of 36.74%.

Against the background of the continuous explosion of demand for artificial intelligence computing power, high-speed optical modules and CPO technology have become key solutions for data center optical interconnection. Dongshan Precision has acquired the core technology of optical chips and optical modules through the acquisition of Source Photonics. At the same time, using the Yancheng base as a mass production carrier, Dongshan Precision has simultaneously deployed optical module production capacity and forward-looking CPO technology. It is expected to occupy a more favorable competitive position in the high-speed optical interconnection industry chain in the future.