Coherent signs $50M CHIPS Act letter of intent for Texas facility

Coherent Corp. (NYSE: COHR) has signed a letter of intent to receive up to $50 million in direct funding under the CHIPS and Science Act from the U.S. Department of Commerce to expand its Indium Phosphide semiconductor manufacturing facility in Sherman, Texas.

The expansion is expected to double manufacturing production space and quadruple wafer production capacity at the Sherman site. Upon completion, the project is expected to create more than 1,000 jobs, including more than 550 direct advanced manufacturing, engineering, and technical roles.

The CHIPS funding builds on approximately $20 million in prior support from the Texas Semiconductor Innovation Fund and the Sherman Economic Development Corporation.

The Sherman facility manufactures photonic devices based on Indium Phosphide, a semiconductor material used to produce optical networking components for AI datacenter infrastructure. Coherent describes the site as housing the world's first and largest volume-production 6-inch InP manufacturing platform.

NVIDIA founder and CEO Jensen Huang commented on the partnership, stating: "Coherent has been an important NVIDIA partner for more than two decades, and its expanded InP manufacturing in Texas will help strengthen the U.S. supply chain for the AI infrastructure the world is racing to build."

Bill Frauenhofer, Executive Director for Semiconductor Investment and Innovation at the Department of Commerce, said the CHIPS incentives "will expand production capability, strengthen the U.S. semiconductor supply chain, and accelerate the next generation of critical optical technologies."

A groundbreaking ceremony was held at the Sherman facility with NVIDIA, federal and state officials, and local community leaders on the day of the announcement.

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