AAOI · Applied Optoelectronics, Inc.

Applied Optoelectronics, Inc. (AAOI) entered into a $94.1 million Design-Build Agreement with LCC3 Solution Inc. for the OMD 3 (FAB4) cleanroom construction project. The project will add approximately 195,591 square feet of ISO Class 6 certified cleanroom space, plus office and warehouse areas, at the company's Houston facility. This investment significantly expands AAOI's manufacturing capacity, supporting its long-term growth strategy in the optical components and semiconductor markets. The agreement includes substantial incentives for LCC3 to complete milestones on time and meet performance standards, totaling up to $15.8 million, alongside liquidated damages capped at $4.9 million for delays. Payments are tied to progress with a 10% retainage, reducing AAOI's upfront cash outlay. The targeted substantial completion date of January 10, 2027 suggests a construction timeline of approximately 6-7 months. This capital commitment reflects AAOI's confidence in future demand and its need for advanced cleanroom facilities for production.