AWSC stock surges on silicon photonics hype

Shares of Taiwanese semiconductor manufacturer AWSC (2455) experienced a significant rally, hitting the daily upper limit of 324.5 New Taiwan dollars on July 22. The surge is fueled by renewed investor enthusiasm for silicon photonics (CPO) related stocks and positive projections for AWSC's upcoming laser projects.

Recent reports from an Australian brokerage firm suggest that AWSC's laser projects are slated for mass production next year. This is expected to significantly boost the company's revenue, potentially surpassing its photodiode business. The company has already commenced mass production of 100mW continuous wave (CW) lasers, and its electro-absorption modulated laser (EML) project is currently undergoing sample shipments, with mass production anticipated by the end of the year.

Analysts have revised their earnings per share (EPS) forecasts for AWSC upwards for the years 2026 to 2028, projecting NT$5.6, NT$11, and NT$17 respectively. This optimistic outlook is further supported by the expansion efforts of overseas substrate suppliers, which are expected to alleviate supply chain constraints. Despite the positive momentum, investors are cautioned to exercise prudence due to the stock's substantial gains this year, which have already doubled.