Applied Optoelectronics Inc. (NASDAQ:AAOI) shares rose 2% Monday after the company announced it received its first volume order for 1.6T data center transceivers from a major hyperscale customer.
The initial order totals more than $200 million and is expected to return the customer to its previous status as a 10%+ customer for Applied Optoelectronics, according to the company. Shipments are expected to begin early in the third quarter of 2025 and should be complete in the fourth quarter of this year, following product qualifications.
The Sugar Land, Texas-based company said the transceivers will be used to boost network bandwidth for AI workloads. Applied Optoelectronics manufactures optical and HFC networking products for AI applications.
Dr. Thompson Lin, Founder, Chairman, and CEO, said the company’s transceiver portfolio enables customers to order both 400G and 800G or 1.6T products. With expansion at its Taiwan facility ongoing and construction underway at its new Sugar Land facility, the company expects to have the largest production capacity for 800G and 1.6T transceivers in the U.S.
Applied Optoelectronics continues to expect to produce over 500,000 units of combined 800G and 1.6T transceivers per month by the end of this year, including both U.S. and overseas production.
Stefan Murry, Chief Financial Officer and Chief Strategy Officer, said the company expects 1.6T will become the next step for hyperscalers as GPU performance increases and AI cluster sizes grow.