Applied Optoelectronics Says U.S. Expansion Will Take Longer

Applied Optoelectronics expects its U.S. expansion planned for 2027 to take longer than expected, as power and construction delays slow added capacity despite a new multi-year strategic agreement with a cloud customer.

Applied Optoelectronics (AOI) disclosed the agreement in its third-quarter 2026 results. It described the customer as a leading cloud data center customer. The company did not name the customer or disclose the agreement’s value.

AOI’s data center revenue reached about $156 million in the third quarter of 2026, compared with about $43.94 million in the third quarter of 2025. Total revenue was about $270 million in the 2026 quarter.

The company expects its installed equipment to support monthly production of more than 500,000 800G and 1.6T optical modules by the end of 2026. Its target is monthly capacity above 1 million modules by the end of 2027. Those figures describe production capacity, not shipments.

Power connections are taking longer than expected, and other construction problems are slowing the U.S. expansion. The agreement improves longer-term business visibility, while the company’s capacity targets depend on its planned expansion.