Stock prices surge! The "light in, copper out" trend of AI data centers has ignited testing demand, leading to additional orders for Aehr (AEHR.US), a leader in silicon photonics.

When the bottleneck of interconnection in AI data centers evolves from "not computing fast enough" to "not transmitting fast enough," silicon photonic technology is transitioning from an alternative solution to a necessary infrastructure. In this transformation, semiconductor testing equipment provider Aehr Test Systems (AEHR.US) is becoming a key technology enabler. The company announced on Tuesday that it has received a follow-up production order from its leading silicon photonic wafer-level burn-in (WLBI) customer for a fully automated FOX-XP multi-wafer production burn-in system to support the continued expansion of the customer's next-generation silicon photonic integrated circuit manufacturing capacity. The system is expected to be delivered in the first half of 2027. Boosted by this news, Aehr's stock price surged about 7% in pre-market trading on Tuesday, building on a more than 14% increase on Monday. The stock has already seen a cumulative rise of over 300% this year. Strategic Significance: Silicon Photonics Moving from "Technology Validation" to "Mass Production" This order represents a continuation of Aehrs long-standing partnership with its leading silicon photonics customer. The order includes Aehr's turnkey FOX-XP multi-wafer burn-in testing system, configured to parallel test up to 9 pieces of 300mm wafers and equipped with an automated FOX WaferPak AutoAligner for fully automated, hands-free high-volume burn-in operations after integration with automated wafer handling equipment. This is the third FOX-XP WLBI order that Aehr has received in 2026, with the previous two orders received in February (valued at $14 million) and March. The customer has successfully installed and validated the first FOX-XP production system equipped with the fully automated WaferPak Aligner in the fiscal year 2026. The AI industry is experiencing a paradigm shift from "transmitting electrons" to "transmitting photons." This customer is developing advanced silicon photonic devices for next-generation optical interconnects and optical I/O architectures, targeting applications in large-scale AI and cloud data centers, as well as advanced packaging for AI processors and high-performance computing devices. These silicon photonic devices enable significantly enhanced bandwidth and lower power consumption communication between AI processors, memory, switches, and network devices, directly addressing one of the major bottlenecks faced by the continuous expansion of AI infrastructure. The customer received its first FOX-XP production system with the fully automated WaferPak Aligner in the 2026 fiscal year, successfully completing installation and demonstration, achieving full integration and hands-free mass production operations with automated wafer handling equipment and 300mm wafer FOUP autonomous guided vehicles. Aehr President and CEO Gayn Erickson stated, "The successful installation and mass production validation of the first fully automated system at this customer marks another important milestone in our long-term partnership. Receiving this additional production order early in the new fiscal year reflects the customer's continued confidence in the Aehr FOX-XP platform and represents an encouraging start to fiscal year 2027." Silicon Photonics: The "Optical Advance, Copper Retreat" Revolution in AI Data Centers Behind the increased frequency of Aehr's orders is the accelerated penetration of silicon photonic technology in the AI infrastructure field. According to market research firm LightCounting, silicon-based optical module sales are expected to exceed 50% of the overall market for the first time in 2026, with total sales of optical modules, AOCs, NPOs, and CPOs expected to approach $80 billion by 2031. TrendForce estimates that the CPO/NPO market will surpass $39 billion by 2030. NVIDIA Corporation's Spectrum-X Ethernet silicon photonic technology has entered full production as of June 2026, and CPO technology is expected to see large-scale deployment in 2027. The silicon photonics industry is rapidly moving from technology validation to mass production. Yole analysts pointed out that at the Photon West 2026 exhibition, optical interconnect technology has moved beyond the roadmap discussion stage to become core infrastructure for AI data centers. As large-scale AI infrastructure expands, major technology companies and AI infrastructure providers are increasingly adopting optical interconnect technologies to overcome the limitations of traditional electrical interconnects in bandwidth, latency, and power consumption. Industry leaders have identified silicon photonics and optical I/O as key enabling technologies for the future of AI clusters, rack-level computing, and chip-to-chip communication, aimed at permanently replacing copper interconnects that are nearing their performance and power limits. Industry forecasts indicate that as optical communication becomes closer to AI processors and eventually enters processor packaging through optical I/O architectures, silicon photonic deployment is expected to see significant growth in the coming years. Aehr believes that driven by the growth of fiber optic interconnections in large-scale AI data centers, silicon photonic production is poised for several years of considerable expansion. In this trend, wafer-level burn-in testing is becoming a fundamental step in the silicon photonic manufacturing process. Erickson noted, "As the complexity, power density, and yield of silicon photonic devices continue to increase, WLBI is becoming a foundational manufacturing step for many next-generation devices. Identifying potential defects before packaging and stabilizing the integration of lasers can improve manufacturing yields, reduce overall production costs, and achieve the long-term reliability required for large-scale artificial intelligence infrastructure." Transformation Results: From Silicon Carbide to the "Second Growth Curve" of AI Semiconductors The growth of Aehr's orders reflects a profound transformation in the company's business structure. Two years ago, over 95% of the company's revenue came from the electric vehicle silicon carbide business; by fiscal year 2026, this segment accounted for less than 5%. The wafer-level burn-in testing business for AI accelerators, CPUs, and network processors has become the primary growth curve, contributing 71% of annual revenue. On July 15, Aehr reported its fourth-quarter fiscal year 2026 financial results, with adjusted earnings per share of $0.11, far exceeding the market expectation of a loss of $0.01; revenue reached $18.835 million, exceeding expectations. Quarterly bookings reached a historical high, driving the stock price up more than 30% on that day. The company anticipates a revenue surge of 160% to 200% for fiscal year 2027. In addition to silicon photonics, Aehr is also providing WLBI solutions for AI processors, data center hard disk read/write heads, silicon carbide, and gallium nitride power semiconductors, and is collaborating with a major NAND flash supplier to develop WLBI for the next generation of flash memory wafers. Market Reaction: Over 400% Increase This Year, Silicon Photonics Becomes a New Valuation Anchor This year, Aehr's stock price has increased by over 400%. Following the announcement of this order, its stock spiked again by approximately 7% in pre-market trading. Previous orders have established a strong performance record for Aehr. On June 17, the company announced it received a follow-up order for the FOX-XP system from a networking product company for the data center optical transceiver market. On February 26, Aehr secured a $14 million order from a leading AI processor customer that includes several new fully automated FOX-XP wafer-level testing and burn-in systems. Silicon photonics is currently accounting for about 20% of Aehr's total revenue, and as AI data centers structurally migrate from "electrical interconnect" to "optical interconnect," this proportion is expected to continue to grow. Wedbush analysts have raised the target price to $125. As the copper interconnects of AI data centers approach physical limits and optical interconnects become the obvious choice, Aehr Test Systems, leveraging the first-mover advantage of its FOX-XP platform in silicon photonic wafer-level burn-in testing, is becoming an indispensable equipment provider in this "optical advance, copper retreat" revolution. From the $14 million AI processor order to follow-up orders from leading silicon photonic customers, to the expected revenue growth of 160% to 200% for fiscal year 2027this testing equipment provider based in Fremont, California is quietly establishing an irreplaceable ecological niche in the underlying supply chain of AI infrastructure.