Coherent has signed a letter of intent to receive up to $50 million in funding under the CHIPS and Science Act to expand its indium phosphide semiconductor manufacturing facility in Sherman, Texas. The investment is intended to double the manufacturing space at the site and quadruple its wafer production capacity. The company states the expansion is expected to generate more than 1,000 new jobs.
The Sherman plant currently houses what Coherent describes as the world’s first and largest volume-production platform for 6-inch indium phosphide. The company notes that indium phosphide-based photonic devices are used to create high-speed optical interconnects. These connections facilitate data movement between processors, memory, and systems within artificial intelligence infrastructure. Coherent indicated that this role becomes increasingly important as AI workloads grow.
Jim Anderson, chief executive officer of Coherent, stated in a press release that the investment expands American capacity to manufacture critical technologies that enable AI. He added that the project creates high-value employment and reinforces United States leadership in advanced manufacturing, photonics, and innovation.
The CHIPS award builds upon approximately $20 million in support previously provided through the Texas Semiconductor Innovation Fund and the Sherman Economic Development Corporation. A groundbreaking ceremony for the project took place at the Sherman facility on June 16. The event was attended by federal and state officials, local community leaders, and representatives from NVIDIA.
The expansion is linked to a partnership between Coherent and NVIDIA that spans more than two decades. Jensen Huang, founder and chief executive officer of NVIDIA, described AI factories as the infrastructure of a new industrial revolution. He stated that connecting millions of graphics processing units into a single computing system requires optical technology designed for scale, speed, and energy efficiency.
