Shares of Fabrinet (NYSE: FN) soared 14.1% in early trading Thursday after the optical components manufacturer announced an expanded partnership with Spanish photonics firm iPronics to accelerate commercialization of programmable silicon photonics technology. The collaboration focuses on scaling production of iPronics’ field-programmable photonic gate array (FPPGA) chips, which enable reconfigurable optical circuits for AI, data center, and telecom applications.
The Thailand-based contract manufacturer, known for precision optical packaging, previously worked with iPronics on prototype development. Analysts suggest this expanded deal positions Fabrinet to capitalize on the $2.4 billion silicon photonics market projected by 2027. “This is a strategic move into higher-margin design-led manufacturing,” said a tech sector analyst who requested anonymity due to client relationships.
Silicon photonics, which integrates optical components onto silicon chips, is gaining traction for AI infrastructure due to its energy efficiency advantages over traditional copper interconnects. Fabrinet CEO Seamus Grady cited “increased customer demand for adaptive photonic solutions” in a statement, though the company declined to name specific clients.
Market observers note the timing aligns with major cloud providers’ roadmaps to adopt co-packaged optics. However, some caution that commercial viability remains unproven at scale. “While promising, programmable photonics still faces yield challenges,” warned a Bernstein research note reviewed by SourceRated. The firm maintains a Market-Perform rating on Fabrinet.