Coherent plans a major Texas expansion to boost optical networking chips used in advanced computing systems.
Coherent Corp. plans to expand its indium phosphide semiconductor manufacturing facility in Texas after signing a letter of intent for up to $50 million in funding under the U.S. CHIPS and Science Act.
The proposed funding from the U.S. Department of Commerce will support the expansion of Coherent’s 6-inch indium phosphide (InP) semiconductor plant in Sherman, Texas, a facility that produces optical networking components used in artificial intelligence infrastructure.
The company said the project will double its manufacturing floor space and increase wafer production capacity fourfold. Once completed, the expansion is expected to create more than 1,000 jobs, including over 550 advanced manufacturing, engineering, and technical positions.
The move comes as demand for AI infrastructure continues to surge, increasing the need for optical networking technologies that transfer large volumes of data between processors and memory systems inside data centers.
Powering AI data flows
Coherent’s Sherman facility manufactures photonic devices based on indium phosphide, a semiconductor material widely used in high-speed optical communication systems. According to the company, the site operates the world’s first and largest volume-production 6-inch InP manufacturing platform.
The planned expansion will add new cleanroom space and wafer fabrication equipment to increase output of AI-focused optical networking components. The project also builds on approximately $20 million in support already provided through the Texas Semiconductor Innovation Fund and the Sherman Economic Development Corporation.
Coherent said the investment further strengthens its relationship with NVIDIA, a longtime customer and partner. The two companies have worked together for more than two decades on technologies supporting advanced computing and networking systems.
“AI is transforming our world and driving a new era of American manufacturing to build the infrastructure that will power the AI data centers of the future,” said Jim Anderson, Chief Executive Officer of Coherent. He added that semiconductor photonic devices are critical components of AI infrastructure because they enable the high-speed connectivity needed to move growing volumes of data between processors, memory, and computing systems.
Expanding domestic chip supply
Federal officials said the proposed award is intended to strengthen domestic production of strategic semiconductor technologies while reducing supply chain risks.
“Indium phosphide photonics are essential for enabling high-speed data transmission within AI systems, telecommunications, and advanced networks,” said Bill Frauenhofer, Executive Director for Semiconductor Investment and Innovation at the Department of Commerce.
The expansion was announced alongside a groundbreaking ceremony attended by company executives, NVIDIA representatives, government officials, and local leaders. NVIDIA CEO Jensen Huang highlighted the growing role of optical technologies in large-scale AI deployments.
“AI factories are the infrastructure of the new industrial revolution. Connecting millions of GPUs into one thinking machine requires optical technology built for scale, speed, and energy efficiency,” Huang said. The Sherman facility is expected to play a larger role in supplying optical networking technologies as AI data centers continue to grow in size and complexity.
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With over a decade-long career in journalism, Neetika Walter has worked with The Economic Times, ANI, and Hindustan Times, covering politics, business, technology, and the clean energy sector. Passionate about contemporary culture, books, poetry, and storytelling, she brings depth and insight to her writing. When she isn’t chasing stories, she’s likely lost in a book or enjoying the company of her dogs.