technologyScore 35/100Research
AAOI laser fabrication transitioning from 4-inch to 6-inch wafers to address ELSFP/CPO demand; CPO lasers require 5-6x larger die size vs. transceiver lasers
Thompson Lin· Applied Optoelectronics· AI· 2026-05-07· about Applied Optoelectronics (AAOI)
“Right now, we have been doing a four-inch growth process. Our target is to go to six-inch by end of next year... The CPO laser is about 300 to 400 milliwatts, compared to 70 milliwatts for 800G transceivers and 100 milliwatts for 1.6T transceivers. The die size is much bigger—minimum maybe five or six times bigger.”
Why it matters
CPO (co-packaged optics) architecture requires high-power, large-die lasers that demand node migration from 4-inch to 6-inch wafers. This is a structural technology shift driven by data center bandwidth demands and represents a multi-year capex and equipment upgrade cycle.
Investment implication
MOCVD and advanced photonics equipment suppliers (AIXTRON, Veeco, Applied Materials, etc.) will see demand for larger-format processing tools. Indium phosphide substrate suppliers must scale to 6-inch wafers. Laser testing and reliability (thermal, optical power) equipment vendors will see increased activity.