Applied Optoelectronics, Inc. (AAOI) has announced a 388,000‑sq‑ft expansion in Pearland, Texas, bringing its total Houston‑area manufacturing footprint to 900,000 sq ft. The new facility will be added to the company’s existing 210,000‑sq‑ft site under development near Sugar Land and a 154,000‑sq‑ft building at the Blue Ridge Commerce Center.
The expansion is designed to lift AAOI’s production of 800G and 1.6T transceivers to 700,000 units per month. In addition, the company projects a 350 % increase in laser fabrication capacity by the end of 2027, positioning it to meet the surging demand for high‑speed optical connectivity in AI‑driven data‑center environments.
AAOI’s 2025 full‑year revenue reached $455.7 million, an 83 % year‑over‑year increase, and the company’s gross margin stood at 30 %. The expansion is a strategic response to the projected $55 billion AI data‑center optics market by 2029, and it strengthens AAOI’s competitive moat against rivals that rely on overseas supply chains.
Investors welcomed the announcement, reflecting confidence in AAOI’s ability to capture the growing AI data‑center market. The expansion aligns with the company’s goal of becoming the premier high‑volume U.S. producer of AI‑focused transceivers and optics.
"The demand for optical connectivity in data centers has exceeded our expectations. We are focused on ensuring every critical function—from supply chain and manufacturing capacity to quality, reliability, and customer support—is positioned to scale rapidly to meet this demand," said Dr. Thompson Lin, Founder, Chairman, and CEO.
"By expanding our footprint now, we are ensuring we can meet accelerating customer demand and support the next wave of AI infrastructure deployments," he added.
The move not only expands AAOI’s manufacturing capacity but also signals a long‑term commitment to innovation in high‑speed optical technology. By scaling production in the U.S., the company reduces supply‑chain risk, improves lead times for key customers, and positions itself to capture a larger share of the high‑growth AI data‑center market.
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