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03 Feb 2026
Contract manufacturer of in-demand photonics components sees additional opportunity in co-packaged optics.
Fabrinet, the Bangkok-based contract manufacturer specializing in high-end photonics assemblies, has posted record-breaking sales of $1.13 billion for the final three months of 2025.
Exceeding the billion-dollar mark for the first time and also beating earlier sales guidance provided by company management, the total represents a 36 per cent increase on the same period in 2024, with CEO Seamus Grady pointing to the impact of several key programs with major customers involved in the wider artificial intelligence (AI) data center build-out.
He referenced sharp increases in sales relating to various forms of optical communications, driven primarily by demand for data center interconnects (DCIs), telecommunications, and high-performance computing.
Optical transceivers and other key components and modules are made by the company for blue-chip clients including the likes of Nvidia, Cisco, and Amazon Web Services (AWS), as well long-term customers such as Lumentum and Infinera.
Major capacity expansion
That sharp upturn in sales was reflected on the bottom line too, with Fabrinet able to post a pre-tax income of $120 million, up from $95 million a year earlier.
“We expect this strong sequential growth to continue in the near term, particularly as our second and third fully automated production lines get qualified,” noted Grady, highlighting the major capacity expansion currently under way.
Fabrinet’s new “Building 10” construction is expected to add some 2 million square feet of manufacturing capability in Thailand by the end of this year, with some of that facility scheduled to be completed by the end of June.
“At the same time, we are creating additional manufacturing space at our Pinehurst [Bangkok] campus, converting office space into manufacturing space and relocating those offices into a new building on that campus,” Grady added.
That expansion is being driven in part by what is expected to be a sustained increase in demand for existing products, alongside new developments including co-packaged optics (CPO) and optical circuit switches (OCS).
Describing the emerging market for CPO products as “very exciting”, the CEO told an investor conference call discussing the latest results:
“CPO [is] really an evolution from silicon photonics and the precision photonics packaging capabilities we've developed over many years. You know, we have and will continue to invest heavily and work closely with our customers to align our capabilities with their roadmaps.
“For many years CPO has been just on the horizon, but right now it's much more real than it has ever been, and we're in an excellent position to benefit from that.
“We believe we're far ahead of most of our competitors in the space in making this technology a reality, and we're already seeing some CPO revenue, although the amounts are relatively small right now.”
As well as working on CPO programs for three different clients, Grady said that Fabrinet was also engaged on a number of efforts for OCS production. “We think it has a significant role to play in the future,” he said.
Sales boom to continue
One significant issue for the firm at the moment remains the availability of externally modulated lasers (EMLs), which continues to constrain Fabrinet’s ability to produce datacom transceivers - although Grady did point out that a second source of EMLs has now been approved by a key customer.
Looking ahead, the Fabrinet executive team said they were confident that the same business drivers that helped produce the latest results would extend into the current quarter, for which the firm is expected to deliver another record-breaking sales figure of somewhere between $1.15 billion and $1.20 billion.
• Despite that positive outlook, Fabrinet’s Nasdaq-listed stock price dropped in value by around 15 per cent as markets digested the latest geopolitical developments alongside prospects for the wider AI sector.
However, at close to $420 that stock price remains close to double its valuation 12 months ago, and represents a market capitalization in the region of $15 billion.
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