SUGAR LAND, Texas – Gov. Greg Abbott announced a $20.8 million grant from the Texas Semiconductor Innovation Fund to Applied Optoelectronics, Inc. to expand its manufacturing operations in Sugar Land.
The project represents more than $279 million in total capital investment and is expected to create 500 jobs.
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Abbott said the expansion strengthens Texas’ role in advanced manufacturing and semiconductor production.
“Texas is leading America’s resurgence in advanced manufacturing,” Abbott said in a statement. “This investment … will create hundreds of high-skilled jobs and advance our state’s leadership in innovation and semiconductor manufacturing.”
AOI, founded in Houston in 1997, designs and manufactures fiber-optic networking products. The Sugar Land expansion will increase production of semiconductor chips and optical transceivers used in high-speed data infrastructure.
Company leaders say the investment will help meet growing demand tied to artificial intelligence and data centers.
“We are proud to partner with the State of Texas to expand our homegrown manufacturing,” said Stefan Murry, AOI’s chief financial and strategy officer. “This investment helps us increase production, create high-quality jobs, and help define the future of AI data center infrastructure.”
State Sen. Joan Huffman, who sponsored the Texas CHIPS Act, said the funding supports continued semiconductor growth across the state and strengthens the Houston region as a manufacturing hub.
State Rep. Suleman Lalani added the investment highlights Sugar Land’s growing role in next-generation technology and economic development.
The Texas CHIPS Act, signed into law in 2023, created the Texas Semiconductor Innovation Fund, which provides grants to boost semiconductor research, design and manufacturing across the state. The program is administered through the governor’s office to encourage industry expansion and support workforce development.