en.Wedoany.com Reported - On the evening of June 16, China's Dongshan Precision Manufacturing (DSBJ) issued an announcement on foreign investment. The company's seventh board of directors' second meeting approved a foreign investment proposal, agreeing to its subsidiary Source Photonics and its subsidiaries to implement an optical chip and optical module expansion project in Changzhou and other locations. The total investment for the project is $1.2 billion, funded by the company's self-raised capital. The construction goal is to increase the overall production capacity of Source Photonics to meet the needs of the industry and downstream customers.
The implementing entities for this expansion project are Source Photonics Holdings (Cayman) Limited and its subsidiaries. The project is named the Optical Chip and Optical Module Expansion Project, primarily focusing on optical chip design and manufacturing, packaging, optical module assembly, and performance testing. The announcement clarifies that this investment falls within the approval authority of the board of directors, does not require submission to the company's shareholders' meeting for review, does not constitute a related party transaction, and does not constitute a major asset restructuring.
DSBJ's latest investment is directly related to the growing demand for high-speed optical communication components driven by the AI computing industry. In the announcement, the company stated that optical chips and optical modules are core foundational components of the AI computing industry, and the existing production capacity of Source Photonics can no longer meet the needs of the industry and downstream customers. Upon completion, this expansion will be used to fill the capacity gap, accommodate customers' medium- to long-term large-scale procurement needs, and optimize Source Photonics' product structure.
Source Photonics has become a significant asset in DSBJ's optical communication business layout. The company has been included in DSBJ's consolidated financial statements since October 2025. In fiscal year 2025 and the first quarter of 2026, its consolidated revenue accounted for 3.58% and 16.02% of DSBJ's total consolidated operating revenue, respectively, while its profit accounted for 22.69% and 52.92% of the company's consolidated profit. This change indicates that Source Photonics' impact on DSBJ's performance structure is rapidly increasing.
In terms of technology and manufacturing foundation, Source Photonics has long been deeply involved in the R&D and manufacturing of optical chips and optical modules, possessing a full-chain production process covering optical chip design, manufacturing, packaging, as well as optical module assembly and testing. For high-speed optical module companies, capacity expansion involves not only factory and equipment investments but also requires simultaneous alignment of process yield, customer certification, supply chain stability, and batch delivery capabilities.
The project still faces approval and market risks. DSBJ cautioned that this expansion still requires obtaining preliminary approvals such as project registration and filing, environmental impact assessment, and energy assessment. If policies are adjusted, project approval conditions change, or market demand falls below expectations, the project may be subject to changes, delays, suspensions, or terminations. Subsequent progress will depend on the advancement of approvals, the release of customer demand, and the ramp-up of optical chip and optical module production capacity.
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