Applied Optoelectronics yesterday announced a $20.9 million grant from the Texas Semiconductor Innovation Fund (TSIF) to help expand manufacturing capacity in Sugar Land. The $279 million project is expected to create 500 jobs.
Founded in Houston in 1997 by President, CEO and Chairman Dr. Thompson Lin, AOI specializes in the design and manufacture of fiber-optic networking products. The expansion in Sugar will increase production of specialized semiconductor chips and transceivers used to build high-speed optical networking infrastructure. AOI executive Stefan Murry said the investment will "help to define the future of AI data center infrastructure."
The TSIF fund provides grants to higher education and state entities for R&D, and to businesses for economic development related to semiconductor design and manufacturing.
AOI’s 2026 expansion plans are already underway to occupy an additional 210,000-square-foot manufacturing facility adjacent to its current headquarters in Sugar Land. According to the company, once completed, AOI will have the largest production capacity for AI-focused data center transceivers in the U.S. The company is "scaling 800G transceiver production aggressively" and anticipates reaching more than 100,000 units per month in production capacity by year-end—40% will be made in the U.S.
The company's origins stem from the University of Houston and NASA’s Johnson Space Center, testing and proving the durability of extremely high-purity semiconductor materials in space. Nearly 60 of the company's leaders hold PhDs, and the company has been issued 340 patents, with 192 still pending.
The company has an on-site wafer fab and cleanroom in Texas with R&D facilities in Atlanta, and additional engineering and manufacturing in Taipei, Taiwan, and Ningbo, China.
