[News] Coherent Signs Long-Term Supply Agreement with China-Based VOT for 6-Inch InP Substrates

On November 6, VOT announced that its controlled subsidiary, Guangdong Xianrui Technology Co., Ltd. (Xianrui Technology), had signed a long-term supply letter of intent with Coherent Corp.

Under the agreement, Xianrui Technology will supply 6-inch indium phosphide (InP) substrates to Coherent’s facilities in Switzerland and Sweden from 2027 to 2029. The estimated transaction value is no less than USD 601 million.

The two parties may extend the supply period by another year, subject to mutual agreement on pricing and volume.

Founded in December 2025 with registered capital of approximately CNY 100 million, Xianrui Technology is jointly held by VOT, which owns a 50.0832% stake, and Qingyuan Xiandao Special Materials Co., Ltd., a subsidiary of Vital Materials, which holds 42.8955%.

At a meeting held in early November, VOT said its InP business had developed an integrated capability spanning raw materials, equipment, processes and large-scale production of large-diameter substrates. Xianrui Technology has completed three generations of crystal development, progressing from 2-inch to 4-inch and then 6-inch substrates. It is among the first manufacturers in China to introduce 6-inch InP substrates and one of the few companies worldwide capable of supplying them in volume.

To secure raw material supplies, Xianrui Technology is leveraging Vital Materials capabilities in mass-producing 8N-grade high-purity indium and producing electronic-grade red phosphorus with a purity of 6.5N or higher. The company has secured stable supplies of both key materials through supply agreements.

On the customer front, Xianrui Technology supplies InP substrates to domestic and overseas manufacturers of optical communication chips and devices, and has begun volume deliveries. Demand among domestic customers is currently shifting from 2-inch and 3-inch substrates to 4-inch products, while overseas customers are transitioning from 4-inch to 6-inch substrates.

As of the end of September, Xianrui Technology had nearly 10,000 units of 6-inch InP substrates in its order book. Sales value from overseas orders for 6-inch substrates accounted for approximately 63% of the total value of its overseas orders.

VOT reported revenue of CNY 2.093 billion for the first three quarters, up 45.04% YoY. Net profit attributable to shareholders reached CNY 84.28 million, up 1,036.93%, while adjusted net profit attributable to shareholders stood at CNY 118 million, an increase of 1,132.94%.

In the third quarter alone, revenue totaled CNY 900 million, up 112.68% YoY. Net profit attributable to shareholders reached CNY 93.48 million, turning from a loss in the same period last year to a profit.

(Photo credit: VOT)