Luxshare-ICT Shifts From Component Supplier to AI Data Center Systems Partner
Luxshare Precision Industry Co., Ltd. reported 33.81% year-over-year growth in its communications and data center business during 2025, with revenue reaching RMB 24.57 billion. The company's gross margin in the segment improved to 18.40%, up 2 percentage points from the prior year.
The growth reflects a fundamental shift in how the company operates. Luxshare-ICT is moving beyond selling individual connectors, cables and modules. It now positions itself as a systems partner that addresses architecture-level challenges in AI data centers.
System-Level Problems Require System-Level Solutions
As AI clusters scale from individual servers to rack systems and larger networks, performance increasingly depends on how power, heat and data flow across the entire infrastructure. High-speed interconnect must support greater bandwidth while controlling signal loss and latency. Thermal solutions must handle higher heat density. Power systems must evolve toward rack-level and high-voltage architectures.
Luxshare-ICT's research and development process starts from customer architecture, not from individual products. Engineers ask: How will the AI cluster scale? How are compute nodes and switches connected? What power will the rack consume? Where are thermal bottlenecks likely to emerge?
This top-down approach allows the company to combine four core capabilities-electrical interconnect, optical connectivity, thermal management and power management-into integrated solutions.
Electrical Interconnect: The Near-Term Opportunity
Within AI racks, copper-based interconnect solutions remain critical for short-reach, high-density connections where latency, power efficiency and signal integrity matter most. Luxshare-ICT's portfolio includes high-speed backplane solutions, CPC and NPC solutions, DAC, ACC and various cable products.
The company's technology roadmap has progressed from 56G and 112G toward 224G, with work underway for 448G and beyond. In 2025, the company's 224G KOOLIO CPC/NPC solution and 224G Intrepid NEXUS backplane connector entered commercial use in mainstream AI clusters in China and overseas.
Copper interconnect is not a single-generation opportunity. As AI architectures evolve, demand will increase for solutions that balance transmission distance, signal integrity, density, manufacturability and total system cost.
Copper and Optical: Different Networks, Different Technologies
Luxshare-ICT views copper and optical solutions as complementary, not competing. In scale-up networks, copper interconnect will remain important for short-distance transmission and low latency. In scale-out networks with longer reach and larger cluster sizes, optical solutions will play a greater role.
The company is developing a "copper plus optical" portfolio that includes CPC, NPC, XPO, NPO and CPO-related technologies. This approach gives customers flexibility rather than locking them into a single technical path.
Luxshare-ICT's optical connectivity portfolio includes DPO, LPO and LRO optical modules with speeds up to 1.6T. In 2025, the company introduced LRO and LPO modules designed to reduce transmission power consumption and latency. Its 800G and 1.6T optical modules have entered small-batch supply, with 800G LRO passing validation with certain customers.
Thermal Management Moves to Center Stage
As AI accelerators increase in power, thermal management has become a critical factor in system performance and deployment density. Luxshare-ICT's thermal solutions cover active cooling, passive cooling, liquid cooling and temperature-control systems.
The company has invested in microchannel technology and diamond-copper thermal materials. These investments matter because AI data center cooling is no longer about adding more fans or larger heat sinks. Customers need solutions that are compact, efficient and closely integrated with server, rack and switch architecture.
Luxshare-ICT's advantage lies in combining manufacturing precision with system-level design. This allows the company to support different deployment scenarios, from air-assisted liquid cooling to cold plate systems and advanced liquid cooling architectures.
Power Management: Preparing for Higher-Density Racks
Power delivery is undergoing structural change. As AI racks move toward higher power density, traditional server-level power systems are insufficient. The industry is moving toward rack-level power distribution and higher voltage architectures.
Luxshare-ICT's power portfolio includes Power Shelf and Rectifier solutions for AI racks, DC Busbar products, CRPS units up to 3200W, and various Power Module, VRM and VPM products. The company has built capabilities around 800V power systems and achieved project progress with core customers.
Power efficiency directly affects system cost, thermal load, rack density and data center operating expenses. These capabilities allow Luxshare-ICT to participate earlier in customer architecture discussions.
Global Expansion and Customer Engagement
In 2025, Luxshare-ICT deepened cooperation with leading domestic cloud service providers while making progress in overseas markets. The company reported notable business development progress in North America, with multiple core component products recognized by leading overseas cloud service providers and computing equipment manufacturers.
For overseas customers, Luxshare-ICT's value extends beyond technology development. The company supports product validation, manufacturing ramp-up, quality control and cross-region delivery at scale. As AI infrastructure becomes more complex, customers need suppliers that combine engineering depth with manufacturing reliability.
AI data center architecture is still in early stages of change. Over the next several years, customers are expected to continue upgrading compute density, network bandwidth, cooling systems and power distribution. Luxshare-ICT is positioning itself not as a single-product vendor but as a platform provider across electrical interconnect, optical connectivity, thermal management and power management.
For management teams overseeing infrastructure decisions, understanding these system-level tradeoffs-between copper and optical, between cooling approaches, between power architectures-has become essential. The companies that solve these practical engineering problems at scale will define the next generation of AI infrastructure.
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