Xili Optoelectronics secures a new round of financing, and Legend Capital increases investment in the thin-film lithium niobate photonic chip platform

Recently, "Xili Optoelectronics Technology (Hangzhou) Co., Ltd." (hereinafter referred to as "Xili Optoelectronics"), a provider of thin-film lithium niobate on-chip system photon engines, completed a new round of financing. Legend Capital entered the game, and the old shareholder Yuancheng Origin followed the investment. After the first-round investment from Yuancheng Origin, Xili Optoelectronics has once again gained recognition from leading industrial capital, marking that the company has entered a new stage of development in the platform-based R & D, engineering verification, and industrial implementation of thin-film lithium niobate photonic chips. The funds from this round of financing will be mainly used to improve the integration and engineering capabilities of the thin-film lithium niobate photonic chip platform, promote the iteration of core processes, wafer-level manufacturing, and mass-production verification, and further explore cooperation with downstream industrial partners such as optical modules, AI data centers, and communication equipment to promote the practical application of photonic integrated chips in AI computing power interconnection and next-generation communication networks.

Thin-film Lithium Niobate Reaches the Inflection Point of Photonic Material Upgrade

As large AI models drive data centers from single-card computing power to large-scale clusters, optical interconnection is becoming a core part of computing power infrastructure. The continuous upgrade of bandwidth, power consumption, distance, and integration places higher requirements on the underlying photonic material platform. Every leap in optical communication and integrated photonics technology essentially depends on breakthroughs in material performance: Materials determine whether optical signals can be modulated faster, transmitted with lower loss, and integrated with higher density, and also determine the long-term evolution space of chip systems in high-frequency, high-speed, and low-power consumption scenarios.

Lithium niobate is a classic material that has been long verified in the photonics field. It has excellent linear electro-optic effects, low optical loss, high stability, and a wide transparent window. Its linear electro-optic effect enables high-speed and low-distortion regulation of optical signals by electrical signals, which is an important physical basis for high-performance optical communication and microwave photonics systems. At the same time, lithium niobate also has outstanding nonlinear optical properties, which can support complex optical field regulation capabilities such as frequency conversion, optical frequency combs, and parametric processes, providing an important material basis for wide-spectrum optical communication, precision measurement, quantum information, and other fields.

Thin-film lithium niobate (TFLN) further solves the limitations of traditional bulk lithium niobate materials in miniaturization, integration, and wafer-level processing. Through thin-film, wafer, and chip technologies, TFLN retains the material advantages of lithium niobate such as high speed, low loss, high linearity, and strong nonlinearity, while significantly improving device integration, process consistency, and platform scalability. Compared with traditional material systems, TFLN is more in line with the development needs of high-bandwidth, low-power consumption, and high-integration photonic chips and is regarded as an important direction for the next-generation integrated photonics platform.

The Demand for AI Optical Interconnection Explodes, and Future Scenarios such as 6G and Quantum Open up Long-term Space

The rapid expansion of AI cluster scale is driving the continuous upgrade of data center interconnection requirements in four directions: "larger scale, higher bandwidth, longer distance, and lower energy consumption". Under multi-layer interconnection architectures such as Scale Up, Scale Out, and Scale Across, traditional electrical interconnection and existing optical module solutions are gradually facing bottlenecks in bandwidth density, link power consumption, and scalability. The collaborative evolution of photonic chips and advanced packaging has become a definite industrial direction. Judging from the industry signals released by OFC 2026, the network bandwidth demand and energy efficiency pressure driven by AI have become the most core growth lines in the optical communication industry. Directions such as high-performance integrated photonics, low-power optical interconnection, advanced packaging, manufacturing scale-up, and supply chain collaboration are continuously heating up, and thin-film lithium niobate is also gradually moving from laboratory technology to a new stage of product readiness, manufacturing volume increase, and industrial chain collaboration.

In addition to AI data centers, emerging directions such as 6G wireless communication, integrated communication and sensing, low-altitude economy, optical computing, and quantum information are also forming medium- and long-term demand traction for high-performance integrated photonics platforms. These scenarios are not simply adding new downstream applications but are all pointing to the industrial trend of higher spectrum utilization efficiency, higher bandwidth density, lower system power consumption, stronger on-chip integration, and higher reliability. Therefore, the competition in the photonic chip industry will gradually shift from the improvement of single-device performance to the systematic competition of underlying material platforms, wafer-level process capabilities, packaging integration capabilities, and industrial ecosystem collaboration. The new-generation integrated photonics platform represented by thin-film lithium niobate is expected to become an important underlying support platform and industrial cornerstone in this round of industrial evolution.

A Global Source Innovation Team Promotes the Industrialization of Thin-film Lithium Niobate from the Laboratory

For underlying platform technologies such as thin-film lithium niobate, the real competitive barriers not only come from single-point performance breakthroughs but also from long-term process accumulation, understanding of system architecture, engineering transformation capabilities, and the ability to define downstream scenarios. Professor Wang Cheng, the founder/chief scientist of the company, is one of the main pioneers of global thin-film lithium niobate photonics technology and the core inventor of thin-film lithium niobate electro-optic modulators. Professor Wang Cheng holds a bachelor's degree in microelectronics from Tsinghua University and a doctorate in electrical engineering from Harvard University. He studied under Professor Marko Lončar, an internationally renowned scholar in the field of lithium niobate photonics, and participated in the co-founding of the thin-film lithium niobate photonic chip company HyperLight.

The company's core team has a profound international scientific research background and industrialization capabilities, covering key aspects such as material understanding, wafer-level processes, chip design, device engineering, and industrial cooperation. Relying on the source innovation accumulation and the engineering transformation capabilities of the industrialization team, Xili Optoelectronics is accelerating the promotion of thin-film lithium niobate technology from laboratory results to practical applications in AI optical interconnection and next-generation communication networks.

Lin Lin, Vice President of Lenovo Group and Partner of Legend Capital, said: "Large AI models drive data centers to evolve into large-scale clusters, and optical interconnection has become a bottleneck in computing power. With its advantages of high speed, low power consumption, and high integration, thin-film lithium niobate is reaching the inflection point of photonic material upgrade. Xili Optoelectronics was founded by a global source innovation team in thin-film lithium niobate. Professor Wang Cheng, the founder, is an important pioneer in this field. The team has formed a complete closed-loop of capabilities from material understanding, wafer processes to chip system integration, with a clear path for engineering and scale-up. Legend Capital will leverage its industrial ecosystem advantages to help the enterprise accelerate technology verification and commercial expansion, and promote the development of AI optical interconnection and next-generation communication infrastructure."

Zheng Ding, Partner of Yuancheng Origin, said: "Since the seed round of Xili Optoelectronics, Yuancheng Origin has always accompanied and fully supported the team's growth, witnessing and helping the company complete the entire process from underlying technology verification, engineering implementation to in-depth docking of industrial resources. The thin-film lithium niobate platform has outstanding advantages in the field of high-bandwidth, low-loss, and low-power optical interconnection, and has broad and long-term industrialization prospects in the fields of AI data centers, coherent communication, and next-generation communication networks. The core team of Xili Optoelectronics has a profound background, with both world-class academic achievements and solid system-level engineering implementation capabilities and forward-looking industrialization vision. Since its establishment, the company has made steady breakthroughs and remarkable achievements in product definition, customer benchmark verification, and core team building. We are long-term optimistic about the development dividends of the high-performance optical interconnection track and highly recognize and firmly believe in the strength and potential of the Xili Optoelectronics team. In the future, Yuancheng Origin will continue to empower and support the team as an early shareholder, fully supporting the team to achieve a leapfrog development from technological leadership to product commercialization and from sample verification to large-scale industrial application."