AOI Raises $12 Million in Series C Offering.

Business Editors/High-Tech Writers

SUGAR LAND, Texas--(BUSINESS WIRE)--Feb. 4, 2004

Applied Optoelectronics Inc., a leading manufacturer of laser diodes, photodetectors, and optical modules for fiber optic communications systems, has raised $12 million in its Series C private placement.

This investment brings the total capital raised by AOI since its inception in early 1997 to $29.2 million.

AOI specializes in the manufacture of high-performance transmitter lasers, photodetectors, and related assemblies for fiber optic networks including cable television, wireless, and high performance digital optical networks.

The current investment includes additional capital from existing investors, as well as significant investments from new investors, including Sycamore Ventures and Harbinger Ventures, both of Silicon Valley, and Chiao-Tung Bank of Taiwan.

"This investment represents a significant infusion of capital, of course, but the quality and experience of the investors, both new and existing, are a critical testament to AOI's vision of leadership in the optoelectronic components market," remarked Dr. Thompson Lin, AOI's founder, president and CEO.

"We view AOI as an important addition to our investment portfolio, based on their 7-year history of innovation in the optoelectronic device industry. They have demonstrated the ability to not only anticipate market demands, but quickly capitalize on these trends by offering an extensive product line that answers the needs of a variety of market segments," stated Dr. Stephen Chiao of Sycamore Ventures.

AOI's semiconductor fabrication facilities near Houston, engage in the production of a variety of optical communications products, including the lasers and photodetectors that act as the transmitting and receiving devices, respectively, in optical fiber communications networks. With special emphasis on the unique needs of the cable television and wireless industries, the company manufactures advanced analog transmitter lasers, incorporating extremely low noise and distortion figures, while simultaneously offering industry-leading optical output power.

With nearly 70 employees and a global sales force that has garnered over 180 customers worldwide, AOI plans to use the majority of the funds for capacity expansion, including additional equipment and manpower necessary to increase its production.

"Discussions with many of AOI's leading customers were a key factor in our decision to invest. It is clear that AOI is not only offering a compelling value proposition from an investment standpoint, but also offering its customers products that enhance their bottom line by offering significant cost and performance advantages vis-a-vis their competitors," remarked Dr. Peter Hsieh, Partner at Harbinger Ventures.

Additional information is available at: www.ao-inc.com