USI's AI Bet: Eugenlight Buyout Targets Next-Gen Data Centers

SHANGHAI, Jan. 16, 2026 – Universal Scientific Industrial (USI) has made a decisive move to capture the exploding demand for AI infrastructure, announcing today that its subsidiary, Universal Optoelectronics, has acquired a controlling stake in silicon photonics pioneer Eugenlight Technologies. The deal signals a significant strategic push to dominate the high-speed optical interconnect market, a critical component for the future of data centers and high-performance computing.

The Race for AI Infrastructure Dominance

The acquisition comes at a pivotal moment for the tech industry. The rapid proliferation of generative AI and large language models is placing unprecedented strain on data center infrastructure, creating an insatiable appetite for faster, more efficient data transmission. Traditional copper-based connections are hitting a wall, unable to keep pace with the bandwidth and power requirements of modern AI clusters.

This bottleneck has ignited a race to develop and deploy advanced optical interconnects. The market is poised for explosive growth, with industry analysts projecting the global optical interconnect market to surge from around $15 billion to over $52 billion by 2033, a compound annual growth rate exceeding 13.5%. The segment specifically serving AI clusters is on an even more aggressive trajectory, with some reports indicating it could double from $5 billion in 2024 to over $10 billion by 2026.

At the heart of this revolution is silicon photonics, a technology that integrates optical components onto silicon chips. By using light (photons) instead of electricity (electrons) to transmit data, it offers vastly superior speed, lower latency, and significantly reduced power consumption—all critical metrics for scaling AI operations sustainably. This acquisition positions USI to directly address this demand, moving beyond its traditional electronics manufacturing role into a core provider of the technology that will underpin the next generation of computing.

Eugenlight: A Silicon Photonics Powerhouse

Founded in 2016, Eugenlight Technologies has established itself as a high-tech enterprise at the forefront of optoelectronic innovation. The company is recognized as a pioneer in silicon photonics integration, developing the high-data-rate optical engines and components that have become strategic assets for top-tier optical transceiver vendors worldwide.

Eugenlight’s core value lies in its ability to master the complexities of silicon photonics. This technology not only boosts performance but also leverages mature CMOS manufacturing processes, enabling miniaturization and cost-effective production at scale. The acquisition gives USI access to this crucial intellectual property and a team with nearly a decade of specialized experience. While AI data centers represent the most immediate and lucrative application, Eugenlight's technology has far-reaching potential, with applications in emerging fields like satellite-based space optical communications, automotive LiDAR systems, and the nascent field of photonic computing.

The existing leadership at Eugenlight will remain in place, ensuring continuity for its clients and partners. Dr. Simon Xu, chairman of Eugenlight, expressed optimism about the merger's potential. "Since the creation of Eugenlight almost a decade ago, we have stayed committed to developing optoelectronic integration technologies and products," he stated. "Today, as the tide of generative AI presents magnificent opportunities for optical interconnects, we are determined to become part of USI, aiming to be empowered by USI's global platform, expanding global manufacturing capacity and client base, strengthening the supply chain, and thereby accelerating the success of EugenLight. Our focus persists in advanced optical interconnect technologies and products including NPO and CPO."

USI's Integrated Ecosystem Strategy

This acquisition is not an isolated event but a cornerstone of USI's broader, multi-faceted strategy for the data center market. Jeffrey Chen, Chairman of USI, outlined the company's three key innovation pillars: computing/accelerator boards, high-voltage direct current (HVDC) power supplies, and now, a significantly enhanced optical interconnects business. By integrating Eugenlight, USI is building a comprehensive, vertically integrated ecosystem.

The move allows USI to offer end-to-end capabilities, from initial design and miniaturization to mass production, aligning perfectly with its D(MS)2 (Design, Manufacturing, Miniaturization, Industrial software and hardware Solutions) service model. This deep integration strengthens USI's position within the supply chain and creates powerful synergies with its parent company, ASE Technology Holding, a global giant in semiconductor packaging and testing. This relationship provides Eugenlight with unparalleled access to advanced manufacturing, a global client base, and a robust supply chain, which is expected to dramatically accelerate its growth.

"EugenLight Technologies' integration into USI marks a significant milestone in the development of USI's optical interconnect business," said Jeffrey Chen. "With strong technical expertise and an excellent reputation among clients, EugenLight will play a key role for USI's growth in this field. USI will fully support EugenLight in scaling up and becoming a global brand in optical interconnect and optoelectronic applications."

Market Consolidation and the Future of Connectivity

USI's acquisition of Eugenlight reflects a powerful trend of consolidation within the highly competitive optical components industry. As the demand for AI hardware intensifies, major players like Intel, Cisco, and Broadcom have been actively acquiring specialized firms to secure critical intellectual property and control a larger portion of the value chain. This "race to control the interconnect layer" is reshaping the competitive landscape.

By securing Eugenlight's expertise, USI is better positioned to compete against these integrated giants. The focus on technologies like Near-Packaged Optics (NPO) and Co-Packaged Optics (CPO), mentioned by Dr. Xu, is particularly forward-looking. CPO, which involves placing optical I/O directly on the same substrate as the main processing chips (like GPUs or CPUs), is widely seen as the next major leap in data center architecture. It promises to further reduce latency and power consumption, enabling even more powerful and dense computing systems.

This strategic investment not only broadens USI's product portfolio but also solidifies its role as a key enabler of future technological advancements. As the industry continues its relentless march toward faster, more integrated systems, USI's move to bring advanced optical capabilities in-house ensures it will be a crucial partner in building the infrastructure for the AI-driven world.