(Yicai) Aug. 12 -- Yuanjie Semiconductor Technology's shares rose after the Chinese company said it plans to invest CNY4.3 billion (USD637.5 million) to expand its laser chip production capacity to meet demand changes and grow its global market share and competitiveness.

Yuanjie [SHA: 688498] closed 5.8 percent higher at CNY1,429 (USD211.85) a share in Shanghai today, after earlier surging by as much as 8.7 percent. Amid a significant growth in the company's performance thanks to strong product demand, the stock soared to a historical high of CNY1,968 on June 23, having more than doubled this year despite dropping 27 percent since.

Yuanjie plans to build a new laser chip production line as well as factories and other supporting facilities in Xixian New Area, located at the joint of Xi'an and Xianyang in Shaanxi province, it announced late yesterday. Construction is expected to take 24 months.

The new project aims to break through Yuanjie's existing production capacity bottleneck, expand high-end laser chip production, enhance product delivery capabilities, and hike market competitiveness, the firm noted, without disclosing the product types and planned annual production capacity.

In addition, the project will help Yuanjie seize business growth opportunities created by the construction of data centers, as well as improve its order delivery stability and response speed, the company stressed.

In February, Yuanjie announced to invest CNY1.3 billion building the second phase of the research and development production center for optoelectronic chips and devices in the Xixian New Area. The project, with a construction period of 18 months, aims to meet the growing demand of domestic and foreign clients.

Yuanjie's indium phosphide optical chips are mainly used in the fiber optic access, wireless communication, and data center markets, while also expanding into the vehicle light detection and ranging sensors market. The company is one of the few in China with independent R&D and mass production high-speed laser chip capabilities.

Yuanjie expects net profit to have skyrocketed 1,197 percent to 1,305 percent to between CNY600 million and CNY650 million (USD88.9 million and USD96.4 million) in the first half of this year from a year earlier, while revenue likely soared 339 percent to 364 percent to between CNY900 million and CNY950 million, thanks China's data center construction boom, it said on July 21.

Editor: Martin Kadiev