Optics.org
ECOPTIK
ECOPTIK
daily coverage of the optics & photonics industry and the markets that it serves
Featured Showcases
Photonics West Showcase
Optics+Photonics Showcase
News
Menu
Business News

Industrial laser sales aid Fabrinet push

05 Feb 2025

Contract manufacturer reports a jump in demand as data center boom continues to dominate wider business.

Fabrinet, the Thailand-based contract manufacturer of advanced optical components and subsystems, has reported another record-breaking financial quarter, with both sales and earnings exceeding expectations.

For the three months ending December 27, the company posted sales of $834 million, up 17 per cent year-on-year. Net income rose 25 per cent over the same period, to $86.6 million.

While those figures remain dominated by applications in optical communications, and the boom in demand for data center optical interconnects in particular, Fabrinet’s management team also highlighted a rebound in demand for industrial lasers, with related revenues up 20 per cent year-on-year.

CEO Seamus Grady said: “Our telecom performance was very strong and benefited from both increasing demand for data center interconnect products as well as early progress from recent systems wins.

“While datacom demand has slightly moderated near-term we continue to anticipate more rapid growth as next-generation products ramp production. With several positive trends, we are very optimistic as we look to the third quarter and beyond.”

New campus construction
With demand expected to remain strong for the foreseeable future, the company has just started construction on a new campus that will add significant manufacturing capacity around 18 months from now.

“Last month we broke ground on Building 10, a new 2 million square-foot facility at our Chonburi campus, adding more than 50 per cent to our total footprint,” Grady told an investor conference call discussing the latest results.

“This new building will provide us with plenty of capacity to support our anticipated growth over the longer term.”

Grady pointed out that Fabrinet typically generated about $1200 in annual revenues per square-foot of manufacturing space - meaning that the additional capacity provided by Building 10 could deliver $2.4 billion.

The firm’s current annual turnover is in the region of $3 billion, with key customers including the likes of Nvidia, Cisco Systems, Lumentum, and Infinera.

Tariffs
Asked about the potential effect of new tariffs being introduced by the US, Grady indicated that Fabrinet would not be impacted. The company's "Casix" subsidiary has a facility in Fuzhou, China, dedicated to fabricating customized glass and crystal optics for internal use - core components of the higher-level assemblies produced for its customers.

“Based on where our factories are located, so far at least, we haven't seen any tariffs being imposed on China,” said the CEO in response to an investor query during the call that took place February 3.

“So, we don't expect any negative impact. If anything, we maybe expect a potential positive impact if customers want to move production with the most recent tariffs.

Looking ahead, Grady and his team said that revenues in the current quarter should end up somewhere between $850 million and $870 million, likely setting another new record.

• Following the latest update, and amid a certain degree of market turmoil in response to tariff-related uncertainty, Fabrinet’s stock price dropped in value by around 8 per cent.

Now trading at around $207 on the Nasdaq, the stock is down from the high of $265 reached shortly before the DeepSeek AI-prompted sell-off in late January, but remains strongly up on a long-term basis.

Nyfors Teknologi ABMad City Labs, Inc.Hamamatsu Photonics Europe GmbHLASEROPTIK GmbHHÜBNER PhotonicsHyperion OpticsPhoton Lines Ltd
© 2025 SPIE Europe
Top of Page