Will material shortages cause a decline in net profit? Zhongji Innolight responds.

Regarding the question of "whether material shortages will cause a decline in net profit," Zhongji Innolight stated that some materials are indeed in tight supply, but this does not mean that the prices of all materials are rising. Gross margin depends on customer prices, product mix, and the company's internal cost-reduction capabilities. Generally speaking, an increase in the proportion of high-end products helps maintain competitive advantages. At the same time, the gross margin of silicon photonics products is better than that of traditional solutions. As the proportion of silicon photonics increases, yield and production efficiency improve, silicon photonics chip capabilities strengthen, and the BOM structure of silicon photonics products is optimized, the company is expected to further reduce costs and maintain or even improve gross margin.