Applied Optoelectronics Enters 10-Year Ningbo Factory Lease

What Happened

• Applied Optoelectronics, Inc.’s wholly owned subsidiary Global Technology, Inc. announced (8-K filed 2026-09-15) a Factory Premises Lease Agreement dated September 10, 2026 with Ningbo Yiduofu Industrial Co., Ltd. Global Technology will lease a building of about 38,311.8 square meters at No.227 Kesheng Rd., Jishigang Town, Haishu District, Ningbo, China. The lease term runs from September 16, 2026 through September 15, 2036, and Global Technology is entitled to a three-month rent-free renovation period upon delivery of the premises.

Key Details

• Lease term: 10 years (Sept 16, 2026 – Sept 15, 2036).
• Annual rent: RMB 6,896,124; starting in the third lease year, rent increases by 3% every three years.
• Tenant rights: right to make alterations at its expense; right of first refusal to purchase the property if Lessor sells; right to require the lease remain binding on a purchaser/transferee; right of first refusal to renew the lease on terms no less favorable than offered to other tenants.
• Lessor may not terminate early except for force majeure or the tenant’s material breach. The company filed a translation of the Lease Agreement as Exhibit 10.1.

Why It Matters

• This is a material long-term operating commitment for Applied Optoelectronics’ manufacturing footprint in Ningbo: it creates an ongoing cash rental obligation (reported as a direct financial obligation) and may require upfront renovation and future capital outlays for alterations. For investors, the lease signals commitment to capacity in China, provides tenant protections (purchase/renewal rights), and establishes predictable rent escalators in RMB that will affect future operating cash flows.