Centec Networks late on Friday announced a major product sales contract with CEG Electronics, valued at over 100 million yuan, exceeding 50% of the company's audited revenue from the most recent fiscal year. The contract covers the supply of Ethernet switch chips.

The company stated that this is a routine business transaction. Given that the contract's performance period exceeds one year, revenue will be recognized gradually across the fiscal years within the contract term, based on actual progress and accounting policies, and will not be booked as a single lump sum in the 2026 fiscal year.

CEG Electronics primarily engages in the development and sales of electronic components, integrated circuits, and semiconductor products. As of December 31, 2025, the company reported total assets of 29.788 billion yuan and net assets of 5.388 billion yuan.

From an equity perspective, CEG Electronics is controlled by China Electronics Corporation, a shareholder holding more than 5% of Centec Networks, making it a related party under regulatory rules. The two companies have maintained stable business cooperation for several years, with CEG Electronics accounting for 33.15%, 26.88%, and 32.15% of Centec Networks' total business procurement in the same category from 2023 to 2025, respectively.

Yu Fenghui, a senior researcher at the Pangoal Institution, commented that the firming up of this large-scale, long-term order further solidifies Centec Networks' regular distribution channel system. Leveraging industrial synergies, the company's Ethernet switch chips can continuously reach downstream applications through an established distribution network, providing stable, long-cycle orders that help smooth out periodic market fluctuations, ensuring sustained production capacity release and strengthening the company's market share and business fundamentals in the high-speed switch chip sector.

Zhang Xiaorong, Dean of the Deep-Institute of Technology, noted that from an industry perspective, investment in network communications and computing infrastructure remains steady. High-speed switch chips, as core hardware components, face ongoing and inelastic downstream demand. The finalization of this long-term, large-scale order reflects the industry's stable procurement needs for high-end network chips. Looking ahead, as downstream computing and networking equipment undergo iterative upgrades, the market space for high-end switch chips will continue to expand, generating business growth for leading chip design firms.