Applied Optoelectronics, Inc. (NASDAQ: AAOI) entered into a design-build agreement with LCC3 Solution Inc. on June 25, 2026, for the construction of a cleanroom facility in Houston, Texas, according to a press release statement.

The contract, valued at approximately $94.1 million, covers the design and construction of the company's OMD 3 (FAB4) project at 11555 North Spectrum Blvd., Houston, Texas. The scope includes design, engineering, procurement, construction, testing, commissioning, and closeout activities.

The facility will include approximately 195,591 square feet of ISO Class 6-certified cleanroom space, 36,500 square feet of office space, and 73,780 square feet designated for shipping, receiving, quality and reliability testing, and inventory operations.

Payments under the agreement are progress-based, with a 10% retainage withheld from each pay application and released upon final completion. Pay applications are submitted monthly, with payments due within 15 days of receipt.

The agreement includes liquidated damages capped at $4.9 million for delays in achieving key milestones or substantial completion. LCC3 Solution Inc. may also earn incentives of up to $6.0 million tied to schedule milestones, up to $4.9 million linked to cleanroom validation testing, and up to $4.9 million tied to warranty performance.