Applied Optoelectronics Inc. (NASDAQ: AAOI) announced plans to expand its Houston-area manufacturing footprint by adding two adjacent buildings in Pearland, Texas, which will provide approximately 388,000 square feet of additional manufacturing capacity.

The expansion increases the company's total Houston-area footprint to 900,000 square feet. This includes a 210,000-square-foot manufacturing facility currently under development near its Sugar Land headquarters, where the company operates 135,000 square feet of capacity, and a recently leased 154,000-square-foot building at Blue Ridge Commerce Center.

The company stated the expansion will enable production capacity of up to 700,000 units of 800G and 1.6T transceivers per month in the Houston area. Applied Optoelectronics also plans to expand its laser fabrication capacity by approximately 350% by the end of 2027.

"The demand for optical connectivity in data centers has exceeded our expectations," said Dr. Thompson Lin, founder, chairman, and CEO of Applied Optoelectronics. "We are focused on ensuring every critical function—from supply chain and manufacturing capacity to quality, reliability, and customer support—is positioned to scale rapidly to meet this demand."

Dr. Stefan Murry, chief financial officer and chief strategy officer, said the expansion aligns with the company's 2027 capacity targets outlined in its recent earnings call. The company manufactures optical and HFC networking products for AI data centers, CATV broadband, telecom, and fiber-to-the-home markets.

Applied Optoelectronics operates research and development facilities in Atlanta, Georgia, and engineering and manufacturing facilities in Sugar Land, Texas, as well as in Taipei, Taiwan and Ningbo, China.