Taiwan-based optical communications manufacturer EZconn is poised to leverage the global rise in artificial intelligence and continued US infrastructure spending to drive growth across its three main product lines in 2025. Despite challenges related to currency fluctuations, the company expects to maintain stable gross margins while achieving positive revenue and profit growth throughout the year.
Recently, EZconn secured a substantial contract from a major US client for a data center project in Malaysia, with shipments set to begin in the third quarter of 2025. This contract is expected to enhance EZconn's revenue trajectory and support its expansion efforts within the wider ASEAN region.
The company forecasts a robust year across its three core product lines. Passive components are expected to grow 15–20% year-over-year, active components—especially those including RF modules—should exceed 20%, and high-frequency connector modules are projected to deliver 20–30% revenue growth. Overall, the company targets a 10% to 15% increase in annual operational performance.
US tech demand shields businesses from tariff risks
Driven by strong demand from leading US clients, EZconn remains insulated from tariff-related slowdowns. The world's top three data equipment manufacturers have increased capital expenditure budgets, accelerating demand for passive products in US data centers. Order visibility extends through year-end, with first-quarter material shortages largely resolved. Production lines are now operating at full capacity with overtime, and optical passive products are expected to account for approximately 85% of 2025 revenue, further bolstering the company's financial performance.
Transitioning to high-margin, high-frequency connectors
EZconn is upgrading its product portfolio from traditional wired connectors to high-precision solutions tailored for 5G communications, automotive applications, and low-earth orbit satellite millimeter-wave (mmWave) technologies. This shift from low-margin to high-margin products is improving overall profitability.
In fiber optics, EZconn notes that markets in the US and Europe have shifted post-pandemic from entry-level to 10G and higher-end modules.
Landmark ASEAN breakthrough
In 2024, US technology firms announced a US$2 billion investment to establish Malaysia's first data center and cloud region. EZconn has secured over half of the associated contract opportunities, with shipments expected to begin in the third quarter of 2025. This landmark order, the company's first major contract in Southeast Asia, carries significant strategic weight and paves the way for expansion into other regional data center projects.
EZconn chairman Steve Chen (center), president Ying-Hua Chang (left), and spokesman Allen Chuan (right) credit: DIGITIMES
Managing forex risk and tariff exposure
The recent appreciation of the Taiwanese dollar poses challenges, with EZconn estimating a potential NT$100 million foreign exchange loss for every 1.2 TWD appreciation against the US dollar. However, EZconn president Ying-Hua Chang emphasized that the impact on gross margins remains minimal due to close coordination with US clients on pricing mechanisms to mitigate exchange rate volatility. Most transactions are quoted in US dollars, providing a buffer against currency fluctuations.
Record revenue growth amid profit pressures
In April 2025, EZconn posted revenue of NT$1.057 billion (US$32.4 million)—up 83.34% from March and 194.59% from a year earlier—marking the second-highest April revenue on record. Net profit after tax reached NT$85 million, up 171% year-over-year. Despite strong top-line growth, profitability was eroded by over NT$100 million in exchange losses.
With the Taiwan dollar stabilizing, EZconn plans to offload portions of its USD reserves. On the tariff front, discussions are ongoing with clients to potentially share future duties, ensuring resilience amid policy uncertainty.
Source: Ezconn; compiled by DIGITIMES, May 2025
Eyes on CPO, defense, and biotech
EZconn has actively invested in silicon photonics, millimeter-wave technologies (including low-earth orbit satellites and 6G), military defense, and biomedical sectors. The company is also partnering with AuthenX to develop co-packaged optics (CPO), with product validation underway and shipments expected to commence in 2026.
Article translated by Sherri Wang and edited by Jerry Chen
