AOI Introduces New Ultra High-Power Semiconductor Laser to Support Silicon Photonics and CPO

Rhea-AI Summary

Applied Optoelectronics (NASDAQ: AAOI) on Dec 18, 2025 introduced a new 400mW narrow-linewidth pump laser targeted at silicon photonics and co-packaged optics (CPO) for AI data centers. The device is a DFB built on AOI's buried hetero (BH) laser platform and delivers optical power over 400mW at 50°C. AOI says the laser can close 800G/1.6T power budgets, enable shared/external laser architectures, reduce wavelength drift and noise, and simplify calibration for scaled silicon photonics systems. Samples are available to select customers and AOI expects volume production later in 2026.

Positive

• Device delivers optical power >400mW at 50°C
• Designed to close 800G / 1.6T power budgets for CPO
• Supports shared/external laser architectures to feed many lanes
• Aims to reduce wavelength drift and improve silicon photonics yield
• Samples available now with volume production expected later in 2026

Negative

• Only select-customer samples available; volume production not until later 2026

Key Figures

Pump laser power 400 milliwatt Narrow-linewidth pump laser for silicon photonics and CPO

Laser output 400mW Can power multiple optical communication channels from one source

Target speeds 800G / 1.6T Aimed at closing power budgets for 800G and 1.6T links

Operating temperature spec 50°C Optical power over 400mW at 50°C

Production timing 2026 Volume production expected later in 2026

ATM program size $180,000,000 At-the-market common stock offering per 424B5 on Nov 7, 2025

Shares outstanding 68,279,888 shares Common shares outstanding as of November 6, 2025 in 424B5

Q3 2025 revenue $118.6M GAAP revenue for Q3 2025 10-Q

Market Reality Check

$29.28 Last Close

Volume Volume 3,061,278 is below 20-day average of 4,950,557 (relative volume 0.62). low

Technical Price 27.13 is trading above the 200-day moving average of 22.87.

Peers on Argus

AAOI was down 6.28% while peers were mixed: TSAT down 7.74%, ADTN down 2.31%, NTGR down 1.58%, DGII down 1.22%, and HLIT up 1.38%, pointing to a stock-specific move rather than a broad sector trend.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 10	800G order win	Positive	+15.1%	First volume order for 800G transceivers and added Q4 revenue contribution.
Nov 25	Conference appearance	Neutral	+1.2%	Upcoming Raymond James conference fireside chat with company CFO.
Nov 06	Q3 2025 earnings	Negative	-7.7%	Strong revenue growth but continued net loss and loss guidance for Q4.
Nov 04	Equity inducement grants	Negative	-10.7%	Inducement RSU grants to new employees under equity plan.
Oct 28	Manufacturing expansion	Positive	-0.9%	Large Sugar Land facility expansion with major investment and job creation.

Pattern Detected

Recent positive operational news often saw strong upside, while capital or expansion items and earnings have sometimes been followed by selling.

Recent Company History

Over the last few months, AAOI reported strong Q3 2025 growth with revenue of $118.6M and guided Q4 revenue to $125M–$140M, but shares fell 7.65% after earnings. An expansion in Sugar Land, including a 210,000 sq ft facility backed by over $150M of investment, also saw a modest 0.94% decline. By contrast, securing a first volume order for 800G transceivers, potentially adding $4–8M to Q4 revenue, triggered a 15.14% gain. Today’s laser launch fits the theme of continued datacenter-focused product development.

Market Pulse Summary

This announcement marks another step in AAOI’s push into AI data center optics, adding a 400mW narrow-linewidth pump laser aimed at 800G and 1.6T silicon photonics and co-packaged optics. It follows recent milestones such as 800G transceiver orders and expanding U.S. manufacturing capacity. Investors may watch how quickly samples convert to 2026 volume production, how the product integrates with existing 800G deployments, and how ongoing losses and capital needs interact with this growth strategy.

Key Terms

silicon photonics technical

"designed to meet growing demand for silicon photonics and co-packaged optics"

Silicon photonics is the technology that uses tiny structures etched into silicon chips to generate, control and detect light for moving data and sensing, essentially putting optical fiber functions onto a computer chip. For investors, it matters because it can dramatically increase data speed and energy efficiency in data centers, telecom networks and advanced sensors, potentially lowering costs and enabling new products much like replacing many metal wires with faster, low-power optical highways.

co-packaged optics technical

"designed to meet growing demand for silicon photonics and co-packaged optics (CPO)"

Co-packaged optics are optical components—lasers and fiber interfaces—physically packaged together with a network switch’s main processing chip so light-based data links sit much closer to the chip instead of traveling over long electrical traces. For investors, this matters because it can dramatically cut power use, boost data speed and density, and lower system costs in large data centers and telecom equipment, much like moving a power outlet next to a heavy appliance to avoid long, inefficient extension cords.

narrow-linewidth technical

"a new 400-milliwatt narrow-linewidth pump laser designed to meet growing demand"

A narrow-linewidth light source or laser emits light concentrated within a very small range of frequencies (colors), meaning its beam is extremely pure and stable—think of a tuning fork that rings at a single clear pitch instead of a noisy bell. Investors care because this precision enables higher performance in fiber-optic communications, sensors, manufacturing and emerging fields like quantum technologies, often commanding premium pricing and opening specialized markets.

buried hetero (BH) structure technical

"DFB with AOI’s mature buried hetero (BH) structure laser platform"

A buried hetero (BH) structure is a semiconductor device design where the active layer that produces light or conducts charge is enclosed by surrounding materials with different electronic properties, much like a seed planted in protective soil to keep it focused and sheltered. This arrangement improves performance and stability by better confining the electrical carriers and optical energy, so for investors it signals potential for higher-performing, smaller devices but also greater manufacturing complexity, capital needs and yield risk.

ring modulators technical

"minimizing wavelength drift and noise in ring modulators, micro-ring lasers"

A ring modulator is an electronic circuit that combines two electrical signals to produce new frequencies, often creating sum and difference tones rather than amplifying the originals. Investors should care because these components are used in communications, radar, and audio equipment; improvements or shortages can affect a maker’s product performance, competitive edge, production costs and revenue potential — like a gearbox that changes how power is delivered in a machine.

micro-ring lasers technical

"minimizing wavelength drift and noise in ring modulators, micro-ring lasers"

A micro-ring laser is a tiny, ring-shaped light source fabricated on a chip that produces a steady beam by trapping and amplifying light as it loops around the ring, like water flowing faster and brighter in a narrow circular channel. For investors it matters because these devices can make data highways on chips faster, smaller and more energy-efficient, enabling lower-cost optical communications, sensing and next‑generation data center or telecom hardware that could drive market growth.

on-chip nonlinear elements technical

"and on-chip nonlinear elements Improves system yield and uptime"

Tiny functional parts built directly into a semiconductor chip whose output does not change in a straight-line way with input — for example, they may amplify, switch, mix or distort signals depending on how strong the input is. Think of them like a faucet that suddenly gushes when pressure passes a point rather than increasing smoothly; that sudden, nonlinear response lets a single chip perform complex signal processing, frequency conversion, or memory-like tasks. Investors care because on-chip nonlinear elements can shrink device size, lower power use, reduce costs, and enable new product features that expand markets or improve margins.

AI-generated analysis. Not financial advice.

SUGAR LAND, Texas, Dec. 18, 2025 (GLOBE NEWSWIRE) -- Applied Optoelectronics Inc. (NASDAQ: AAOI), a leading provider of advanced optical and HFC networking products that power the internet, today announced a new 400-milliwatt narrow-linewidth pump laser designed to meet growing demand for silicon photonics and co-packaged optics (CPO) in AI data centers.

A few years in development, the new 400mW laser addresses situations where lasers with broader line width or higher noise figures lasers limit performance. It can source directly into semiconductor chip-scale systems to provide hyperscalers with a robust, high-performance light source for CPO, silicon photonics and other applications that demand precision and power from a single, stable wavelength. 400mW laser-powered chips can also serve as high-efficiency external sources that can provide the necessary pump power to feed multiple optical communication channels.

Key Benefits Include:

• Closes 800G / 1.6T power budgets by delivering enough optical power to overcome coupling, splitting, and routing losses without exceeding thermal limits near AI switch ASICs
• Enables shared and external laser architectures by reliably feeding many silicon photonics lanes or wavelengths from a single centralized source
• Stabilizes silicon photonics devices by minimizing wavelength drift and noise in ring modulators, micro-ring lasers, and on-chip nonlinear elements
• Improves system yield and uptime by reducing calibration effort, simplifying wavelength locking, and maintaining consistent lane-to-lane performance as systems scale
  
  

Key Performance Specifications:

• DFB with AOI’s mature buried hetero (BH) structure laser platform with excellent reliability
• Optical power over 400mW at 50°C
• Narrow linewidth
  
  

“Sophisticated architectures need high performance optical sources. We have spent the last several years working on the specs to produce an ultra high-power laser that will meet the demands of optical networks today and specifically support the CPO architectures of the future,” said Fred Chang, Senior Vice President and North American General Manager at AOI. “With this new technology, we are raising the bar on laser power, coherence, and stability to offer customers the ideal solution for unlocking scalable optical I/O, simplifying system design, and accelerating the industry’s transition to co-packaged optics at 800G and beyond.”

Samples are now available to select customers, with volume production expected later in 2026.

Additional Resources:

• AOI Semiconductor Lasers
  
  

About AOI  
Applied Optoelectronics, Inc. (AOI) is a leading developer and manufacturer of advanced optical and HFC networking products that are the building blocks for AI datacenters, CATV and broadband fiber access networks around the world. AOI supplies this critical infrastructure to tier-one customers across cloud computing, CATV broadband, telecom, and FTTH markets. The company has R&D facilities in Atlanta, and R&D, engineering and manufacturing facilities at its corporate headquarters in Sugar Land, TX, as well as in Taipei, Taiwan and Ningbo, China. For additional information, visit www.ao-inc.com.  

Media contact:
Sara Cicero
sara_cicero@ao-inc.com
770-331-0269

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/8ab210d5-0815-4c84-af56-f51a05321f59

FAQ

What is the specification of AOI's new laser announced Dec 18, 2025 (AAOI)?

AOI announced a 400mW narrow-linewidth DFB pump laser on a buried hetero platform, with optical power over 400mW at 50°C.

How does the AAOI 400mW laser affect 800G and 1.6T co-packaged optics designs?

AOI says the laser can close 800G/1.6T power budgets by supplying enough optical power to overcome coupling, splitting, and routing losses.

When will AAOI begin volume production of the 400mW laser?

Samples are available to select customers now and AOI expects volume production later in 2026.

Can AOI's new laser feed multiple silicon photonics lanes from a single source?

Yes; the announcement states the laser enables shared and external laser architectures to reliably feed many silicon photonics lanes or wavelengths.

What reliability or platform does AAOI use for the new 400mW laser?

The laser is a DFB built on AOI’s mature buried hetero (BH) structure laser platform, noted for reliability.

How can customers obtain AOI 400mW laser samples (AAOI)?

AOI indicated samples are now available to select customers; interested customers should contact AOI sales or their account representative for access.