Goldman Sachs is constructive on AI optical network upgrades, initiating coverage on RoboTechnik as top call while keeping YJ Semi and YOFC neutral on valuation.

Overview

This is Goldman Sachs’ first coverage report on three companies in China’s optical network supply chain. Its core thesis is that the next stage of AI infrastructure investment is shifting from single-chip compute uplift toward network optimization, bandwidth expansion, and lower end-to-end latency in data transport, which puts optical networking devices, modules, CPO, OCS, SiPh, CW laser chips, and high-end fiber into a longer upturn cycle. Goldman Sachs forecasts 2026-2028E net profit CAGRs of 153%, 81%, and 65% for RoboTechnik, YJ Semi, and YOFC, respectively, but assigns different ratings: Buy for RoboTechnik and Neutral for YJ Semi and YOFC.

Core views

Key views in the report include: first, AI data center architecture is moving from scale-out to scale-up, generating stronger bandwidth and more interconnection demand, and expanding the addressable market for optical modules and optical engines; second, newly emphasized products such as CPO, OCS and HCF are expected to meet higher bandwidth, lower latency, and longer-distance transport requirements; third, pluggable module upgrades to 1.6T/3.2T, together with later-stage upgrades by Chinese cloud providers, may lengthen the industry cycle; fourth, all three companies have room to expand margins, but RoboTechnik has greater growth leverage due to its equipment positioning and ficonTEC integration, while YJ Semi and YOFC are rated Neutral because their valuations are viewed as already relatively full.

Analysis framework

The report combines industry-cycle conditions, product upgrades, client demand, earnings forecasts, and valuation multiples in its framework. For RoboTechnik, it focuses on CPO/OCS equipment, optical assembly and testing equipment, high-precision motion control, machine vision, and PCM software capability. For YJ Semi, it focuses on SiPh penetration, ramp in CW laser chip volume, product power upgrades, and the IDM model. For YOFC, it focuses on AI data center demand for high-end optical fiber, capacity discipline, fiber pricing, and product mix upgrading toward HCF and high-end products. For valuation, it primarily uses discounted P/E and references PEG&M, forward net profit growth, and operating margin.

Methodology notes

• valuation methoddiscounted P/E

  Multiply the forward target P/E by forward EPS, then discount back to the target year by the cost of equity.

  RoboTechnik uses a 50x 2031E P/E discounted back to 2027E at 11.3% COE; YJ Semi uses 50.7x 2030E P/E discounted back to 2027E at 10.8% COE; YOFC uses 17x 2029E P/E discounted back to 2026E at 11% COE.

• valuation referencePEG&M

  Relates peer P/E multiples to future net profit growth and operating margin to determine target multiples.

  The report uses the PEG&M relationship of consumer electronics and technology peers as an important reference for target P/E multiples of RoboTechnik and YJ Semi, emphasizing that high growth and high margins support valuation.

• M&A scenarioM&A rank

  Assesses the likelihood of a takeover and determines whether M&A premium should be included in the target price.

  RoboTechnik and YJ Semi both receive an M&A rank of 3, indicating a relatively low probability of being acquired, so the target price does not include an M&A component.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• RoboTechnik (300757.SZ)

  AI optical networking equipment beneficiary; covers SiPh, CPO, OCS, optical assembly and testing equipment.

  Strengths

  Has high-precision motion control, machine vision algorithms, and PCM software capability; optical equipment share increased after ficonTEC acquisition; CPO/OCS and optical module upgrades support higher equipment ASPs and margins.

  Weaknesses

  Current valuation is relatively high, with 2027E P/E around 158x; still affected by optical interconnect end-demand and cyclicality in solar equipment business.

  Comparison

  Compared with YJ Semi and YOFC, RoboTechnik is more concentrated in equipment and automation, with clearer growth leverage and larger upside, so it is rated Buy.

  Risks

  Intensifying competition, optical interconnect demand below expectations, and downside surprise in solar equipment.

• YJ Semi

  AI optical network laser chip beneficiary, covering DFB, EML, and CW laser chips.

  Strengths

  Benefits from AI server shipments, higher SiPh penetration, CW laser chip ramp, and an IDM model; higher-margin CW products lift overall profitability.

  Weaknesses

  For high-power CW laser chips at or above 300mW, a technology gap with global leaders still needs to be narrowed; valuation is already relatively full.

  Comparison

  Has weaker valuation leverage than RoboTechnik but higher margins and stronger product-upgrade characteristics than YOFC.

  Risks

  SiPh penetration below expectations, intensified competition, and slower cloud capex.

• YOFC

  AI data center high-end optical fiber and HCF beneficiary.

  Strengths

  Covers optical preforms, fiber, cable, and optical modules; has scale and cost advantages; likely to benefit from AI data center demand for high bandwidth and low latency as well as improving fiber pricing.

  Weaknesses

  Traditional telecom demand remains weak; growth depends on AI data center demand, pricing durability, and the commercialization pace of high-end products.

  Comparison

  Has lower valuation than RoboTechnik and YJ Semi, but growth leverage is more muted, so rating is Neutral.

  Risks

  Fiber price below expectations, AI capex weaker than expected, and higher price competition; slower-than-expected HCF commercialization.

Key data

• Average revenue CAGR for the three companies66% in 2026-2028ECompared with 24% during the AI pre-cycle of 2020-2022.
• RoboTechnik net profit CAGR153% in 2026-2028EBenefited by CPO/OCS equipment, optical assembly and testing equipment, and ficonTEC integration.
• YJ Semi net profit CAGR81% in 2026-2028EBenefited by AI server shipments, rising SiPh penetration, and upgrades to the CW laser chip product mix.
• YOFC net profit CAGR65% in 2026-2028EBenefited by high-end transport demand from AI data centers, fiber pricing, and HCF commercialization.
• RoboTechnik target priceRmb688Represents approximately 40%-42.7% potential upside; rating is Buy.
• YJ Semi target priceRmb1,592Represents approximately 30% potential upside, but the rating remains Neutral.
• YOFC target priceHK$255Represents approximately 18% potential upside, but the rating remains Neutral.

Impact & implications

For investment implications, the report argues that the bottleneck in AI compute infrastructure is shifting from point-in-time compute performance to network connectivity efficiency, making the optical network supply chain a possible next growth driver. On the equipment side, RoboTechnik has the largest earnings sensitivity because it sits in CPO, OCS, and high-precision optoelectronic manufacturing equipment; on the chip side, YJ Semi benefits from CW laser chips and higher SiPh penetration but needs to continue narrowing its technology gap with global leaders in high-power CW laser chips; on the fiber side, YOFC benefits from high-end fiber, HCF, and AI data center transmission demand, while valuation and the durability of fiber pricing cycles remain key constraints.

Risks

• Cloud providers’ AI capex slows more than expected.
• AI network technology transition occurs slower than expected, especially the commercialization pace of CPO, OCS, SiPh, and HCF.
• Demand for optical components, optical modules, and high-end optical fiber end-markets is below expectations.
• Sharpened market competition pressures ASPs, gross margin, and earnings expectations.
• RoboTechnik’s solar equipment business declines more than expected.
• YJ Semi’s catch-up in high-power CW laser chip technology is slower than expected.
• YOFC’s fiber pricing and high-end product mix upgradations prove less sustainable than expected.

What to watch

• Global and China cloud provider AI capex trends.
• Commercialization progress of CPO, OCS, SiPh, 1.6T/3.2T optical modules, and HCF.
• RoboTechnik order flow for optical assembly, testing, and OCS automation lines.
• YJ Semi CW laser chip shipments, power upgrades, and customer expansion.
• YOFC high-end optical fiber pricing, capacity utilization, and data center customer penetration.
• Whether each of the three companies delivers 2026-2028E income, gross margin, OPM, and net profit as expected.