Applied Optronics was founded in 1991 as a vertically integrated medical system manufacturer focused on surgical systems. Its core strength and competitive advantage was its diode technology. In order to fund its system business, Applied Optronics began selling single emitter diodes and fiber-coupled modules to the broader medical, military, industrial and research industries. Over time, this became the core business and the surgical system business was discontinued.

In 2000, Applied Optronics was bought by Schwartz Electro Optics (SEO), a defense company focused on the Multiple Integrated Laser Engagement System (MILES) market and a pioneer in the laser industry. This acquisition further solidified Applied Optronics’s already strong foundation in the military arena and was intended to provide SEO with a springboard into commercial markets until the market downturn and SEO’s resulting financial difficulties intervened.

In 2003, Applied Optronics was purchased by Candela Corporation  (Nasdaq: CLZR), one of Applied Optronics’s largest customers, so that Candela could vertically integrate its diode system business and utilize Applied Optronics to expand its R&D capabilities. This partnership has proven successful and has benefited both entities. Applied Optronics is operated at arm’s length and, while it is a key supplier to its parent company, it has been given a mandate for growth without limitation, even in Candela’s own markets.