Nvidia names Taiwan, not China, for a 15x optical capacity build; Eoptolink fell 12.3%, Innolight 8.8%
On October 22, Nvidia named Taiwanese partners for a fifteenfold optical-module capacity build with no mainland names; on October 23, five Shenzhen optical companies answered with a noon announcement cluster and a CNY 1 billion buyback that flipped the ChiNext intraday. The order books are real, but the partner-list question is still open.
Richard Tang · 3 min read
Nvidia−0.23% — Nvidia, down 0.23 percent today is building the AI supply chain's next leg without China's optical-module makers: on October 22 it named Taiwanese partners for a fifteenfold capacity expansion by mid-2027, and no mainland company appeared on the list 1. The market read the exclusion within hours. That day the Shenzhen Component, the main index of Shenzhen's exchange where these companies are listed, closed 3.0% lower, about 5,000 stocks fell, and Eoptolink Technology dropped 12.3% 1. Zhongji Innolight+3.82% — Zhongji Innolight, up 3.82 percent today, the world's largest optical-module maker and Eoptolink's mainland peer, lost 8.8% 1.
The October 22 rout hit optical-module makers hardest
Data
| Value | |
|---|---|
| Eoptolink | -12.3% |
| Zhongji Innolight | -8.8% |
| Victory Giant | -5.3% |
| Shenzhen Component | -3.0% |
Five announcements at noon on October 23 flipped the market
At noon on October 23, five Shenzhen-listed optical-chain companies issued announcements in the same moment, each one aimed at the pessimistic narrative from a different angle 2. Zhongji Innolight, Eoptolink, TFC, Accelink and Source Photonics reported full order books, said overseas customer orders run through 2027 with some demand guidance into 2028, and stated that production is normal 2.
Source Photonics forecast third-quarter revenue up 265% to 293% year on year 2. Eoptolink's board approved a repurchase of CNY 800 million to 1 billion of its shares, capped at CNY 500 a share, funded from its own funds and intended for equity incentives; the plan still needs shareholder approval 23.
The ChiNext, a growth-stock index weighted toward technology hardware, flipped from nearly minus 3% to about plus 2% intraday on the announcements, with Innolight turning positive on roughly CNY 23 billion of volume 2.
The rally ran on short covering, not new money
Read the announcements as what they are. The chroniclers of the reversal note it ran on repositioned existing shares and short covering, not large new money, and call the cluster a risk clarification to repair sentiment, not a report of new large-value orders 2. Next-generation co-packaged and near-packaged optics, the CPO and NPO products Nvidia's capacity plan points toward, remain in customer verification 2.
The wider backdrop is worse. The CSI 300, an index of the 300 largest mainland-listed companies, sits 20% below its June peak, a bear market by the textbook, and the Star50, its Nasdaq-style counterpart, is down about 40% in half a year 4. Margin buying has fallen to levels last seen at the end of 2025 4.
The chain runs plainly: Nvidia re-routes capacity through Taiwan, mainland module makers keep today's orders but lose tomorrow's integration slot, and mainland holders pay the price. Order books and a buyback defend the present. The unresolved question is partner selection, decided in Nvidia's supply-chain meetings, not in Shenzhen announcements 12.
The next named partner list is the test
Watch whether mainland makers appear when Nvidia names partners for its next expansion phase. If they do, the October 22 selloff was mispriced; if they do not, order books will keep the quarter but not the trend.
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More about NVIDIA
NVDA · Fiscal Q2 2027Revenue rose 106% to $96.2B, 92.5% of it from Data Center, “driven by the ramp of our Blackwell Ultra infrastructure”. Gains on equity stakes of $7.8B lifted net income to $59.7B.
Show as a table
| Line | Value |
|---|---|
| Revenue | $96.2B |
| Gross margin | 75.0% |
| Operating margin | 66.2% |
| Net income | $59.7B |
| Hyperscale | $48.7B |
| AI clouds & enterprise | $40.3B |
| Data Center | $89.0B |
| Edge Computing | $7.2B |
| Gross profit | $72.1B |
| Cost of revenue | $24.1B |
| Other income | $7.8B |
| Operating income | $63.7B |
| Operating expenses | $8.4B |
| Tax | $11.8B |
| R&D | $7.1B |
| SG&A | $1.4B |
