Wavelength Opto-Electronic reported a sharp rise in 2026 first-half earnings as AI-led demand for semiconductor equipment lifted sales of its optical components. Net profit attributable to shareholders reached CNY 28.85 million, up 102.65% year over year, while revenue rose 8.89% to CNY 243 million. Net profit after deducting non-recurring items climbed 127.31% to CNY 24.26 million, indicating stronger underlying profitability, and basic earnings per share were CNY 0.25. The company also posted a marked improvement in cash generation. Operating cash flow swung from a net outflow a year earlier to a net inflow of CNY 28.08 million, a 1,283.08% increase, mainly because cash spending on procurement fell from the prior-year period. Gross margin improved to 34.64%, up 4.57 percentage points, which the company linked to a more optimized business mix centered on higher-barrier, higher-value products and to cost-reduction and efficiency measures. Laser optics remained the biggest business line with CNY 145 million in revenue. Infrared imaging optics brought in CNY 77.34 million, up 19.77%, helped by wider use of chalcogenide glass (infrared optical material) in uncooled infrared imaging products that are moving toward smaller and lighter designs. The fastest growth came from the semiconductor and semiconductor-adjacent segment, where revenue reached about CNY 35 million and pure semiconductor product revenue totaled about CNY 18 million, up 83%. Wavelength Opto-Electronic said AI's rapid development is boosting demand across industries and driving growth in China's downstream semiconductor equipment market, where its products are used as core components. Orders and revenue tied to consumer electronics equipment, lithium batteries and other intelligent manufacturing equipment also increased to varying degrees. The company proposed a cash dividend of CNY 1 per 10 shares, and ended the period with total assets of CNY 1.42 billion and net assets attributable to shareholders of CNY 1.21 billion. Institutional investors said the first-half results showed strong profit momentum and improving financial health, while the company's later operating performance bears watching as the semiconductor industry expands.