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Zhen Ding Technology Holding Limited, a leading global PCB manufacturer, announced its consolidated financial results for the third quarter of 2026. Third-quarter consolidated revenue reached NT$64,624 million, up 36.4% YoY, while gross margin reached 27.7%, both setting all-time quarterly highs. Net income was NT$6,916 million, net income attributable to owners of the parent was NT$4,496 million, and EPS was NT$4.02. For the first three quarters of 2026, consolidated revenue reached NT$153,783 million, up 22.4% YoY. Net income was NT$12,690 million, net income attributable to owners of the parent was NT$8,313 million, and EPS was NT$7.66.
According to Zhen Ding, its record quarterly revenue was driven by seasonal demand for mobile communication products and sustained strength in advanced AI applications. Meanwhile, increasing shipments of high-end products and continued product mix optimization significantly enhanced profitability, lifting 3Q26 gross margin by 5.7 percentage points YoY to 27.7%, also setting a new quarterly record. In 1-3Q26, revenue from the mobile communication business maintained double-digit YoY growth, supported by product specification upgrades. Combined revenue from servers, optical modules, and IC substrates surpassed the full-year 2025 level, surging 152% YoY and demonstrating strong growth momentum. With a rising contribution from high-end products, gross margin for 1-3Q26 increased 6.2 percentage points YoY to 24.7%, reaching a record high for the period, while operating margin improved 3.3 percentage points YoY to 9.7%. These results reflect the growing benefits of product mix optimization and continued improvement in the company's overall profitability.
Looking ahead to the fourth quarter, Zhen Ding expects seasonal demand for mobile communication products to remain strong, while high-speed optical modules and AI servers continue to show robust growth momentum, driving revenue to its annual quarterly peak. In 2027, optical modules, AI servers, and IC substrates are expected to sustain rapid growth. New capacity supported by over NT$80 billion in 2026 capital expenditure will gradually come online, further expanding operating scale. A higher-margin product mix should also support improvements in gross margin and overall profitability. With AI-related businesses accelerating, the original target for these three businesses to account for 45-50% of total revenue by 2030 could be achieved as early as 2028, two years ahead of schedule, highlighting Zhen Ding's long-term growth potential in advanced AI applications.
Regarding its advanced AI businesses, Zhen Ding noted that its leading mSAP process technology and mass production capabilities have enabled significantly higher yields for 1.6T optical module PCBs than those of industry peers, securing a key supplier position among leading global optical module customers for high-end products. The company is accelerating mSAP capacity expansion to meet rapidly growing market demand. Looking ahead to 2027, as customers accelerate the adoption of 1.6T optical modules, both shipments and revenue from 1.6T products are expected to surpass those of 800G products, becoming a key growth driver. Zhen Ding also remains committed to its goal of becoming the world's largest supplier of high-end optical module PCBs by 2027. In AI servers, iHDI (Intelligent HDI) and HLC products for GPU and ASIC customers have progressively entered mass production, with shipments continuing to ramp up. iHDI has long been one of Zhen Ding's core technological strengths, and the next two to three generations of products under joint development with customers are also moving toward iHDI designs. Leveraging its established technology and mass production expertise, Zhen Ding sees significant long-term growth opportunities in advanced AI server PCBs and aims to further expand its business scale and market share.
Over the medium to long term, Zhen Ding is also positioning itself to capture the next wave of growth opportunities in Edge AI. As AI models, on-device computing capabilities, and related hardware technologies continue to mature, AI adoption is expected to expand beyond data centers to Edge AI applications, including AI glasses, humanoid robots, and smart vehicles. This trend should drive demand for advanced PCBs with higher technical requirements and greater content value. Leveraging its "One ZDT" strategy and comprehensive advanced PCB portfolio, Zhen Ding has positioned itself early in emerging Edge AI applications to capture long-term opportunities as AI computing expands from the cloud to edge devices, laying a solid foundation for business growth around 2030.
Regarding capacity expansion, Zhen Ding stated that order visibility remains strong across high-end optical modules, AI servers, and next-generation IC substrates, providing solid support for its medium- to long-term expansion plans. The company expects to maintain a high level of capex in 2027-2028, with new capacity primarily focused on these higher-margin, higher-value applications. Zhen Ding currently has 22 new plants under construction and another nine in planning. New capacity will come online in phases from 2026 to 2030, aligned with customer product qualification and mass production schedules. As advanced capacity gradually ramps up, capital investments are expected to translate into increasing revenue and earnings contributions, further strengthening the company's long-term growth momentum and profitability.
Zhen Ding further noted that, over the next three to five years, rapid advances in AI chips will continue to raise the requirements of global cloud service providers (CSPs) and leading chipmakers for faster time-to-market, production ramp-up speed, and supply reliability. As technological complexity, capital requirements, and manufacturing scale become increasingly critical in advanced PCB production, market share is expected to become more concentrated among industry leaders with advanced technologies, comprehensive product portfolios, and large-scale manufacturing capabilities. This trend will further reinforce the competitive advantages of leading PCB manufacturers. With its deep process expertise, comprehensive advanced PCB portfolio, and global manufacturing footprint, Zhen Ding has firmly established itself among the top-tier players in the advanced PCB market. As AI drives structural changes across the industry, the company will continue to deepen partnerships with leading global customers, strengthen its technological and manufacturing advantages, and capitalize on opportunities arising from increasing industry concentration, further reinforcing its leadership position in the global PCB industry.
