Canada’s Enablence Technologies has raised C$25 million ($18 million) to expand production of optical chips at its California plant and a Vietnam facility run in collaboration with ShunYun Technology, an unit of Taiwan’s Foxconn.

The move can tap the rising demand from AI data centers, Enablence said in a statement last Friday. The proceeds will fund capacity expansion at its plants in Silicon Valley and Vietnam, along with working capital, Enablence said.

Enablence said it closed a private placement with investment firm Collingwood Investments, selling about 3.2 million shares at C$7.75 each, or a 21 percent premium to its recent market price, for a 13.3 percent stake.

The Vietnam work is carried out through ShunYun Technology, an optical-transceiver maker owned by Taiwan’s Foxconn and its ShunSin group. Enablence and ShunYun began volume production of optical components in Vietnam in August, under an assembly partnership struck in March.

The arrangement completes an end-to-end chain, featuring chip design in Ottawa, wafer fabrication in California, and packaging and assembly in Vietnam. Enablence considers this as an alternative to Chinese-made optical parts for North American cloud and telecom customers, as U.S. regulators weigh restrictions on Chinese optical transceivers.

Enablence’s planar lightwave circuit chips, also silicon components that route light signals, support high-speed 800-Gb and 1.6-Tb links used in AI computing clusters, as well as telecom networks and automotive lidar.

Chief Executive Todd Haugen said the investment would let the company accelerate its expansion and strengthen its position in the photonics market.

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