Can a light chip costing only a few cents prop up a 10-billion-yuan IPO in Changzhou?

Every time you unlock your phone, the tiny hole at the top of the screen projects tens of thousands of invisible light spots onto your face — they form a 3D facial model of you to confirm "it's you". Apple iPhones usually use chips from US companies, while for most Android phones supporting 3D face recognition, the light sources come from a Changzhou-based company, Vertilite.

Now this company is preparing for an IPO. Its story is far more complex than being an "Android supplier": it once installed "eyes" for new energy vehicles, and now it is eager to enter the machine rooms of AI data centers. After three relocations over ten years, its total shipment has exceeded 900 million units, but the revenue on its books still cannot support the valuation rumored by the public.

Three Transformations of a Single Chip: From Unlocking Phones, to Perceiving Roads, to Connecting AI

In 2017, Apple removed the Home button from the iPhone X, at the cost of adding a tiny hole on the front of the device.

After that, the unlocking action of billions of people around the world changed from "one press" to "one glance". Inside the tiny hole, a laser chip called "VCSEL" projects tens of thousands of invisible infrared light spots onto your face, and the sensor reads the reflected deformation to reconstruct a micron-level 3D facial model.

So you may think it is your phone that recognizes you, but in fact, tens of thousands of light spots have scanned and measured every part of your face.

Apple has its own independent light source supply. On the Android camp side, the light sources come from Changzhou — Vertilite. The most prominent label of this company is "the light source base of the Android supply chain": according to industry media reports, Vertilite's shipment share in the 3D face recognition module field of the Android camp exceeds 70%; as early as 2023, General Manager Chen Xiaochi gave a figure in an interview with industry media that its market share in fields such as Face ID for Android phones exceeded 80%.

Founder Zhao Li was born in 1988. Around 2012, he went to Stanford University to pursue a doctorate in materials science, studying under James Harris, an academician of the National Academy of Engineering of the United States. During his PhD study, he and his team developed the world's first long-wavelength VCSEL laser that can emit light continuously at room temperature.

In those years, 3D face recognition was becoming a new standard configuration for smartphones, but domestic high-end consumer-grade VCSELs were almost a blank, and the global high-end market was monopolized by foreign giants Lumentum and Coherent. In 2015, Zhao Li and several other Stanford doctors returned to China to start their business. The company was originally named "Shanghai Vertilite Optoelectronics", and moved its headquarters to Wujin, Changzhou in 2018.

In the first three years of starting the business, they invested almost all their resources in underlying R&D, and the electro-optical conversion efficiency of their first 850nm chip directly reached the leading level. In 2019, Vertilite made a breakthrough in epitaxial growth, becoming the first domestic enterprise to mass produce VCSELs, with shipments exceeding 10 million units that year.

After gaining a firm foothold in the mobile phone market, they set their sights on the automotive sector.

The automotive-grade market is a battlefield of a completely different magnitude. Consumer-grade chips for mobile phones only need to withstand temperatures up to 85°C, while automotive-grade chips need to operate stably from -40°C to 125°C; the service life of consumer-grade products is 3 to 5 years, while automotive-grade products need to guarantee a 15-year service life; consumer-grade products can make profits with a yield rate of 90%, while automotive-grade products require a yield rate of over 95% — because a single lidar contains hundreds of VCSELs, and if one fails, the entire radar may stop working.

It took Vertilite two and a half years to obtain the AEC-Q102 automotive-grade certification and the IATF 16949 system certification. In some fields, it even began to surpass its international competitors: its anti-reflection VCSELs are supplied to RoboSense, Hesai Technology and Waymo, supporting annual lidar installation volume of over one million new energy vehicles, with a market share of more than 60% in the domestic new energy vehicle lidar light source market.

However, the automotive-grade market soon became highly competitive, and Zhao Li had to find a new battlefield — this time, it was the AI data center. The reason is very straightforward: the more GPUs there are in an AI cluster, the more difficult it is for traditional copper wires to transmit data, and the trend of "optical fiber replacing copper cable" has become the industry consensus. To manufacture 800G and 1.6T optical modules, the light source for short-distance optical interconnection still has to be VCSEL.

In August this year, Vertilite invested 5 billion yuan to build a new high-end laser chip production line in Changzhou, focusing on indium phosphide products.

The latest news shows that the company has submitted a counseling filing application to the Jiangsu Securities Regulatory Bureau, with Guotai Haitong acting as the counseling institution.

900 Million Units and 100-Million-Level Revenue: A Company With Huge Market Imagination But Limited Current Income

If you only look at the first half of its development story, you will think this is a hidden champion that makes huge profits quietly.

Especially after the news came out that it is undergoing IPO counseling, rumors spread widely that it has "cumulative shipments exceeding 900 million units", "domestic consumer electronics VCSEL share exceeding 70%" and "valuation exceeding 15 billion yuan".

However, if you look at the full timeline, a strange phenomenon appears: the company's growth rate does not match its revenue scale.

In 2023, General Manager Chen Xiaochi said in an interview with industry media that the company's cumulative shipment was "over 90 million units"; from 2025 to 2026, the caliber of industry associations and third-party institutions became "600 million units" and "700 million units". The most popular statement recently is "over 900 million units".

The valuation rumor is even more exaggerated. In the commercial database of Tianyancha, the statement that Vertilite has a "valuation exceeding 15 billion yuan" is widely circulated, which seems to have become a "market consensus". The only legally valid figure is hidden in a listed company announcement: last June, Dongyangguang increased its capital investment by 90 million yuan, corresponding to a pre-investment valuation of 3.285 billion yuan.

There is a gap of more than 4 times between 15 billion yuan and 3.285 billion yuan.

In terms of revenue, Vertilite's scale is not large. In 2024, Vertilite recorded a revenue of 125 million yuan, with a net loss of 58.2982 million yuan. In the first quarter of 2025, its revenue reached 41.2343 million yuan, with a net loss of 15.3154 million yuan.

900 million units and 100-million-level revenue. This is the core tension of this company's story: it started its business relying on low-margin high-volume products, and accumulated a very impressive-sounding shipment figure, but this figure has never been converted into considerable profits.

Looking through its shareholder register, the situation is even more thought-provoking: Hubble Investment, Xiaomi Yangtze River Industry Fund, BYD, DJI, Ant Group, and even Hesai Technology and RoboSense, which are competitors of each other. Mobile phone manufacturers, car enterprises, lidar manufacturers, large drone companies, payment giants — Vertilite has almost gathered all players across the entire industrial chain.

However, the fact that "shareholders are also customers" must be seriously responded to by the company during its IPO process, and the regulator will definitely raise questions: investment does not equal purchase orders, and the actual sales revenue from these shareholders has not been fully disclosed so far.

In addition, there is a more cruel side in this industry: while shipments are skyrocketing, the unit price continues to decline.

For example, its peer Changguang Huaxin recorded revenue of 41.1938 million yuan from VCSEL and optical communication chips in 2025, a year-on-year increase of 1036.79% — which sounds very impressive, but its gross margin decreased by 37.5 percentage points year on year, dropping to 12.81%.

The situation is similar for another peer Dugen Optoelectronics: its revenue from VCSEL chips and modules in the first half of 2026 was 12.1191 million yuan, accounting for only 3.13% of its main business revenue.

That means: the entire domestic VCSEL optical communication track has publicly disclosed revenue that is still at the 10-million-yuan level.

So Vertilite has to tell a new growth story. The 5 billion yuan investment in August this year is exactly the start of this new story.

Zhao Li himself once explained: the traditional gallium arsenide process is mature, and foundry services are available; but for the cutting-edge indium phosphide field, "there is no standard and mature foundry division of labor ecosystem formed globally", and materials, design and manufacturing processes are highly integrated, "which relies heavily on repeated debugging and accumulation of front-line engineering experience". If it continues to adopt the pure foundry model, "the development cycle will be greatly extended, and the core process know-how cannot be truly mastered".

In short, Vertilite will no longer operate as an asset-light design company, and it must build its own production lines.

But will competitors give it enough time? At present, Coherent is betting on the world's only 6-inch indium phosphide production line, planning to double its internal InP capacity by the end of 2026, and achieve the goal one quarter ahead of schedule. The CEO of Lumentum publicly stated in April this year that because it "cannot keep up with the growing demand", all its production capacity before the end of 2028 has been fully booked. In the high-end 200G EML field, the orders of overseas leading players have been scheduled to after 2027, while domestic manufacturers as a whole are still in the verification and small-batch production stage.

Therefore, the 5 billion yuan investment is not just for a production line, but also for a ticket to enter the high-end market. Whether it can gain a firm foothold in this field still depends on its yield rate performance.

This article is from the WeChat official account "Ifeng Tech", written by Ifeng Tech, and authorized for release by 36Kr.