Coherent is planning to raise $50 million to expand AI infrastructure photonics device manufacturing capacity

On June 17, global photonics technology firm Coherent (COHR) announced it has signed a letter of intent (LOI) with the U.S. Department of Commerce to access up to $50 million in direct funding under the CHIPS Act. This funding will support the expansion of Coherent’s 6-inch Indium Phosphide (InP) semiconductor manufacturing facility in Sherman, Texas. The investment will address soaring demand for optical networking technologies in AI data centers and further solidify Coherent’s long-standing, recently expanded partnership with NVIDIA. Once the project is completed, the Sherman facility is expected to create over 1,000 jobs, including more than 550 advanced manufacturing, engineering, and technical positions. The expansion will double the facility’s production space and quadruple its wafer manufacturing capacity. This capacity expansion will strengthen the U.S. domestic photonics chip supply chain, meet the high-speed data transmission requirements of AI computing infrastructure, and alleviate communication bottlenecks caused by large-scale AI computations. It will also enable collaboration with NVIDIA to upgrade optical networking and interconnect technologies for AI-centric “Data Center Factories.” Notably, NVIDIA previously announced a $2 billion investment in Coherent.