Daehan Optical Communication has expanded its supply of optical cables for U.S. artificial intelligence (AI) data centers to approximately KRW 41.1 billion. Although the company secured follow-up volume more than six times larger within four months of its initial contract in February, deliveries will continue through the end of 2027, meaning the contract amount and quarterly earnings must be examined separately.

KRW 41.1 Billion Scale Across First and Second Contracts According to a report by NewsPim on February 20, citing a Daehan Optical Communication announcement, the company signed an initial supply contract for 864-core optical cables with a U.S.-based global AI and extended reality (XR) platform company. The contract amount was USD 3.78 million, which was approximately KRW 5.4 billion at the time. About four months later, the follow-up volume expanded significantly. According to a report by EToday on June 16, Daehan Optical Communication signed a second supply contract for 864-core ultra-high-density optical cables for U.S. hyperscale AI data centers. The contract amount was USD 23.68 million (approximately KRW 35.5 billion), about 6.3 times larger than the first contract. Combined, the two contracts total USD 27.44 million, or approximately KRW 41.1 billion.

Deliveries from July 2026 to End of 2027, Distributed Revenue Recognition Expected According to the EToday report, the second volume will be supplied through TFO America, Daehan Optical Communication's U.S. subsidiary. The products will be entirely manufactured at its domestic production base, with delivery scheduled from July 2026 through the end of 2027. This means the cumulative contract value of KRW 41.1 billion will not be recognized as revenue in a single quarter. It is highly likely to be distributed across multiple quarters based on production, shipping, and customer inspection schedules, meaning there may be a time lag between the contract amount and actual quarterly revenue.

864-Core Ultra-High-Density Optical Cables: Why AI Data Centers? According to reports by Newsis and Asia Economy, the 864-core optical cable is an ultra-high-density product containing a total of 864 optical fibers in a single cable. Compared to existing 144-core and 288-core cables, it allows more circuits to be deployed in the same space, making it ideal for constructing large-scale AI data centers and inter-data center networks. Large-scale AI data centers must exchange massive amounts of data in real time between numerous graphics processing units (GPUs) and servers, making products that can accommodate more optical lines in a limited space essential.

Order Expansion ≠ Turn to Profitability... Losses Persist in 2025 However, the expansion of orders does not mean an immediate return to profitability. According to a DataTamu report analyzing electronic disclosures, Daehan Optical Communication recorded consolidated revenue of KRW 139.44673 billion in 2025, down 8.6% year-on-year. Operating loss was KRW 22.91814 billion and net loss was KRW 24.53998 billion, continuing its deficit. For reference, some corporate information sites show revenue of KRW 84.55 billion and an operating loss of KRW 14.12 billion, which likely reflects consolidated versus separate basis figures, so it is advisable not to mix the two metrics.

Q1 2026: Revenue Increase and Reduced Losses, but Profitability Not Yet Achieved According to the Q1 2026 quarterly report disclosed on the Korea Exchange listing disclosure system and corporate information reflecting it, consolidated revenue increased 34.9% year-on-year. Operating loss decreased by 42.8% and net loss by 47.8%. However, neither operating income nor net income turned profitable.

Integrated Production System + Overseas Sales Subsidiary Structure According to corporate information based on the Korea Exchange quarterly report, Daehan Optical Communication has established an integrated production system spanning from optical fibers to finished optical cable products. It operates a business structure that addresses overseas markets through subsidiaries including sales companies in the Americas and Europe.

Key Focus: 'Actual Profit and Loss Contribution' Even though the second contract expanded approximately 6.3 times compared to the first, quarterly revenue recognition amounts may vary as the delivery period extends through the end of 2027. The critical question is whether increased optical cable sales will go beyond covering cost burdens and translate into reduced operating losses. Daehan Optical Communication's North American AI data center order is significant in that it expanded from an initial supply to a large-scale follow-up contract. However, the process by which the contract amount converts into actual revenue and operating profit must be separately verified in future quarterly reports.

[This article is a reference material for investment decisions and does not recommend buying or selling any specific stock. Responsibility for stock investments lies with the investor. This article was written with AI assistance.]