- AOI is an upstart player in the optical transceiver market
- It just bagged a massive deal with a major cloud hyperscaler
- AOI makes its own transceivers in-house in Texas
Proving that everything really is bigger in Texas, semiconductor fab AOI recently secured its first hyperscaler deal for its 800 Gbit/s optical transceivers.
The agreement is worth up to $4 billion (yes, that’s billion) over the next ten years and is a refreshing example of real money being generated by a real business case, setting it apart from spurious nonsense like search-engine-company-Google’s Bard chatbot.
800G transceivers are emerging as the new standard for AI factories and other super high-end data center applications. AOI won the contract partly because it grows its own semiconductors in-house using advanced manufacturing methods, such as MBE (like mine, but different) and MOCVD, which allow it to precisely control how each tiny layer of material is built, down to the individual atom.
AOI is keeping mum about the details of its big score, but its August 10-Q SEC filing states the deal is with a wholly owned subsidiary of Amazon. Since it's unlikely that Amazon is planning to sell $4 billion worth of optical transceivers through its online shopping portal, my journalist brain suggests the actual buyer is AWS. In further wild speculation, the transceivers are likely destined for the new AWS 149-acre facility in Round Rock, 165 miles from Sugar Land (which, in Texas terms, is just down the road, howdy neighbor, etc.).
What else is known about AOI? It is not named for the wonderful Japanese word for bluey-greenish things, aoi. Nor is the name pronounced ‘owee’, which, speaking as the min's Marketer of the Year 2010, is a seriously missed opportunity. In fact, the name stands for Applied Optoelectronics Inc., which is ok if you like that sort of literal moniker, I suppose.
The company posted just over $100 million in revenue in Q2 2025 and is primarily composed of alumni from the University of Houston, with half of its 58 PhDs having graduated from that institution. So, go Coogs! But, and also, massive nerd alert.