Applied Optoelectronics, an optical communication company, surged over 6% intraday! The company announced receiving the first order for 1.6T transceivers from a hyperscale customer.

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Applied Optoelectronics Inc. (AOI), a U.S. optical communication technology company, announced that it has received the first mass production order for 1.6T data center optical transceivers from a long-term major hyperscale customer, valued at over $200 million, marking the official entry of a new generation of high-speed optical interconnect products into large-scale commercial use.

According to AOI’s announcement on March 9, this order is expected to allow the customer to once again become an important customer accounting for over 10% of AOI’s revenue. According to the plan, after product qualification certification is completed, shipment is scheduled to start in early Q3 2026, with delivery to be completed in Q4.

Stefan Murry, Chief Financial Officer and Chief Strategy Officer of the company, stated that as GPU performance improves and AI cluster size continues to expand, network bandwidth must also increase accordingly, "1.6T will become the next logical choice for hyperscale customers."

Dr. Thompson Lin, founder, chairman, and CEO of AOI, said, the company is observing a clear trend of the market rapidly migrating toward higher-speed optical modules, "Our optical transceiver portfolio allows customers to simultaneously purchase 400G, 800G, or 1.6T products from us."

Boosted by this news, AOI’s stock price surged, rising over 6% as of press time. Since the beginning of the year, the company’s stock price has risen more than 157%.

Accelerated Capacity Expansion, Faster U.S. Manufacturing Deployment

In terms of capacity construction, AOI is simultaneously advancing expansion of its Taiwan factory and construction of new production facilities at its Sugar Land headquarters in Texas. Founder and CEO Dr. Thompson Lin stated, the company expects to soon have the largest production capacity of 800G and 1.6T optical transceivers in the United States, and combined with overseas capacity, strives to achieve a total monthly production capacity of over 500,000 units of 800G and 1.6T products by the end of this year.

AOI has engineering and manufacturing bases in the U.S., Taiwan, and Ningbo, China, with an R&D center located in Atlanta, Georgia. The construction of the new Sugar Land facility further strengthens the company’s manufacturing capacity layout in the United States.

AI Drives High-Speed Optical Module Demand Upgrades, Accelerates 1.6T Commercialization

This order demonstrates the continued boost in data center network bandwidth driven by AI workloads. AOI CFO and CSO Stefan Murry pointed out that as AI clusters grow in scale, network-side expansion demand will continue to be released, and 1.6T optical modules are expected to become the mainstream choice for hyperscale data center operators.

AOI stated that its product portfolio covers multiple speed grades of 400G, 800G, and 1.6T, able to meet hyperscale customers’ network upgrade needs at different stages. This mass order from a long-term major customer marks 1.6T products officially moving from qualification certification to scaled shipment.

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