Part 1: Tianfu Communication:AI Era
To discuss Tianfu Communication, we must first address its industry position. In the past, many viewed it merely as a supplier of optical components, selling passive devices. However, that has changed; Tianfu has evolved into a platform enterprise capable of providing a “one-stop optical solution”, covering everything from high-speed optical engines, FAU passive devices, to micro-optical platforms and advanced packaging services, almost encompassing all core components required for data centers and AI servers.
Its value lies in the fact that customers no longer need to piece together a multitude of suppliers but can directly entrust critical processes to Tianfu. Especially in the 800G and 1.6T optical module sectors, time is money. As long as the time to market can be shortened, customers are willing to pay a higher premium, which has transformed Tianfu from being “replaceable” to “indispensable”.
The financial performance is also impressive. In the first half of 2025, the company’s revenue reached 2.46 billion yuan, a year-on-year increase of nearly 58%; net profit was 900 million yuan, also up by 37%.
Although the profit growth rate has not kept pace with revenue, this is largely due to the company’s strategic investments aimed at lowering profit margins: increasing investment in silicon photonics, CPO research and development, as well as the global layout of its new factory in Thailand and headquarters in Singapore. Analysts have even directly raised the net profit forecast for 2025 to 2.35 billion, indicating the market’s optimistic expectations.
Moreover, it is worth noting that 76% of Tianfu’s revenue comes from overseas, making globalization its true foundation. The combination of the Thailand factory and the Singapore headquarters serves to hedge against geopolitical risks and get closer to major clients.
Part 2: Subsidiaries
To understand Tianfu’s story, one must not only focus on the parent company’s financial reports but also comprehend its network of subsidiaries. Jiangxi and Gaoan are the main production bases, ensuring scale and cost advantages; Suzhou’s Tianfu Star and Arctic Light are the sources of technological research and development; the subsidiaries in the United States and Hong Kong handle overseas client relations; while the Singapore headquarters acts as the strategic command center.
Tianfu plans to fully acquire Suzhou Tianfu Star by 100% in 2024.
This signals that the company may possess essential technologies for future growth, and it is willing to invest to maintain complete control. Coupled with the ramp-up of production capacity at the Thailand factory, the synergy from these subsidiaries will directly amplify the financial results in 2025.
How do they collaborate? It’s simple: R&D subsidiaries develop technology → domestic and Thailand factories mass-produce → overseas subsidiaries and headquarters handle sales and delivery → ultimately reflected in explosive growth in the consolidated financial statements.
Although the revenue and profit data of individual subsidiaries have not been disclosed, the overall network’s effect is already evident in the parent company’s performance. In 2025, the full consolidation of Tianfu Star and the release of production capacity from the Thailand factory will be the most direct sources of incremental growth.
Additionally, it is noteworthy that Tianfu established an industrial fund as early as 2016 to invest in optical communication and big data. In the future, acquiring a startup specializing in CPO or silicon photonics core technology could potentially yield additional surprises.
Part 3: Synergies in 2025
By examining the parent company and subsidiaries together, several deterministic impacts can be identified:
Capacity contribution: The Thailand factory will be fully operational, directly serving international clients, with a potentially higher export ratio and improved profit margins.
R&D results realization: The technology from Tianfu Star will contribute revenue and profit through full-year consolidation.
Operational leverage: As demand surges, factory capacity utilization will increase, diluting initial investments, and profit margins may recover in the second half of the year.
This essentially follows a logic of “first compressing profit margins, then releasing leverage”.
Part 4: Risks and Governance
Of course, there are risks. One is the reliance on overseas markets, especially in a complex international environment where supply chain security poses the greatest uncertainty. Another is technological iteration; if the commercialization speed of silicon photonics and CPO does not meet expectations, Tianfu’s R&D investments may take time to yield results.
However, the good news is that the company’s governance remains transparent. For instance, related party transactions, while internal procurement and cost-sharing among subsidiaries are inevitable, the company will disclose special reports. This is crucial for investor confidence.
Part 5: Conclusion
In 2025, Tianfu Communication is essentially an “ecological giant” that relies on a network of subsidiaries for synergy. Its narrative has evolved from being merely a seller of optical components to a global platform capable of driving AI infrastructure.
Growth drivers: The ramp-up of the Thailand factory + the full-year consolidation of Tianfu Star, combined with the surge in demand for AI optical modules.
Risk factors: High dependence on overseas markets and the pace of technological iteration need to be monitored.
Valuation logic: The current pressure on profit margins is a short-term pain; in the long run, the release of operational leverage + realization of technological achievements will provide room for valuation recovery and enhancement. In 2025, Tianfu Communication will be both a “seller of shovels” in the AI supercycle and an integrated platform that strengthens its moat through its subsidiary network.
-END-
If you enjoy my content, please follow me for more!!