Applied Optoelectronics (AAOI) 21st Annual Needham Technology, Media, & Consumer Conference summary

Key business updates and milestones

• Achieved first shipments of 800G products in Q1, with plans to ramp 800G and introduce 1.6T products later in the year.

• Data center revenue surpassed cable TV for the first time in a while, with data center growth expected to outpace CATV.

• Raised annual revenue guidance to $1.1 billion, implying rapid growth in the second half of the year.

• Demand is expected to exceed supply through at least mid-2027, with growth dependent on manufacturing capacity expansion.

• Multiple customers now qualified for 800G, with shipments to a second customer imminent and 1.6T deliveries starting in late Q3.

Manufacturing and capacity expansion

• Manufacturing infrastructure is being scaled in both Taiwan and Texas, with a new 211,000 sq ft Texas facility coming online in Q3/Q4.

• Two additional Houston buildings totaling 388,000 sq ft have been purchased for further expansion, with interior buildouts starting soon.

• Automated manufacturing processes allow rapid replication of production lines across locations, supporting supply chain resiliency.

• Institutional knowledge and in-house equipment design enable efficient setup of new factories.

• CapEx for 100,000 units/month capacity is about $120 million, with plans to reach nearly 1 million units/month by end of next year.

Product and technology roadmap

• 800G expected to remain mainstream in cloud/data centers for years, with 1.6T adoption being a slower transition.

• 800G and 1.6T products share similar designs and manufacturing lines, easing transition and scaling.

• In-house laser fab provides supply chain control and synergy between laser and transceiver development.

• Plans to scale laser fab capacity, with equipment orders placed and expansion underway.

• Transition to 6-inch indium phosphide wafers expected by end of 2027, pending yield improvements.