TAIPEI (Taiwan News) — Taiwan's Ennostar Holdings is gaining market attention as investors assess its potential role as a new entrant in the optical communications supply chain, supported by rising demand from AI and 5G-related applications.
Demand for optical communications components has increased alongside the expansion of high-speed data transmission networks. This has led to tighter supply conditions for indium phosphide (InP), a compound semiconductor material valued for its efficiency in next-generation and high-bandwidth devices, according to the Department of Industrial Technology.
CTEE reported Tuesday that major Taiwanese InP supplier LandMark Optoelectronics is operating at full capacity. It is understood that some customers in the US and China are evaluating additional suppliers to reduce supply risk.
Ennostar has been identified by the market as a key potential beneficiary. As one of the world’s leading producers of epitaxial wafers, the company has experience in mass production for sensing applications, and its existing equipment may also be adaptable for optical communications.
If Ennostar expands into this segment at scale, its potential production capacity could significantly exceed current suppliers in the category, according to industry estimates. However, meaningful revenue contribution from optical communications is not expected until around 2027, reflecting the segment’s longer development timeline.
Institutional investors have raised their rating on the stock from “hold” to “buy,” with a target price of NT$65 (US$2) per share. Foreign investors have recently returned as net buyers, while mutual funds and proprietary traders have also shown increased interest.
In recent sessions, the stock has traded above NT$60 (US$1.9), reaching its highest level in nearly four years. It hit the daily limit-up early trading on Tuesday at NT$62.9.
Ennostar’s current product strategy spans several light-source technologies used in sensing and display applications. Analysts noted that full-year revenue is expected to remain relatively stable to slightly higher under mixed downstream display conditions, while profitability is projected to improve.
