News: Optoelectronics
17 June 2026
Coherent to receive $50m US CHIPS Act funding to expand Sherman 6-inch InP fab
Materials, networking and laser technology firm Coherent Corp of Saxonburg, PA, USA has signed a letter of intent to receive up to $50m in direct funding under the CHIPS and Science Act from the US Department of Commerce to expand its 6-inch indium phosphide (InP) photonic device manufacturing facility in Sherman, Texas.
The investment will support growing demand for optical networking technologies that power AI data centers and further strengthen Coherent’s long-standing and recently expanded partnership with NVIDIA of Santa Clara, CA, USA. At project completion, the Sherman site is expected to create more than 1000 jobs, including more than 550 direct advanced manufacturing, engineering and technical roles. The expansion will double manufacturing production space and quadruple wafer production capacity, significantly increasing domestic US-based production of critical AI-enabling technologies.
The CHIPS award builds on about $20m in support previously provided through the Texas Semiconductor Innovation Fund and the Sherman Economic Development Corporation.
The announcement coincides with a groundbreaking ceremony held with NVIDIA, federal and state officials, and local community leaders at Coherent’s Sherman facility. Together, the proposed CHIPS investment, NVIDIA partnership, and Sherman expansion underscore the increasingly vital role of photonics innovation in enabling AI infrastructure and advanced manufacturing, says Coherent.
“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,” says CEO Jim Anderson. “Semiconductor photonic devices are essential building blocks of AI infrastructure, enabling the high-speed connectivity required to move unprecedented amounts of data between processors, memory, and systems. This investment expands America’s capacity to manufacture critical AI-enabling technologies, creates high-value jobs, and reinforces US leadership in advanced manufacturing, photonics, and innovation,” he adds. “We thank our partners at NVIDIA, Secretary Lutnick, Bill Frauenhofer and the CHIPS Program Office team, Governor Abbott, Adriana Cruz and the Texas Semiconductor Innovation Fund, and Kent Sharp and the Sherman Economic Development Corporation for their continued support as we invest in expanded capacity and future growth.”
Expanding foundation of AI infrastructure
Coherent’s Sherman site is home to the world’s first and largest volume-production 6-inch InP manufacturing platform, providing the scale needed to support rapidly growing demand for AI-driven optical interconnect technologies. As AI workloads continue to scale, these technologies are becoming increasingly critical to overcoming data movement bottlenecks and enabling higher-performance, more energy-efficient computing architectures.
The expansion will add advanced wafer fabrication equipment and cleanroom capacity to increase production of InP-based photonic devices at scale.
Strengthening US manufacturing
Coherent’s expansion will strengthen domestic supply chain resilience and expand US-based manufacturing capacity for strategically important semiconductor and photonics technologies.
“Indium phosphide photonics are essential for enabling high-speed data transmission within AI systems, telecommunications, and advanced networks,” notes Bill Frauenhofer, executive director for Semiconductor Investment and Innovation at the Department of Commerce. “The CHIPS incentives will expand production capability, strengthen the US semiconductor supply chain, and accelerate the next generation of critical optical technologies.”
Partnership driving future growth
Coherent and NVIDIA have worked together for more than two decades to advance technologies that support increasingly demanding compute and networking architectures. The Sherman expansion reflects the growing importance of US manufacturing capacity, resilient supply chains, and photonics innovation as AI systems continue to scale.
“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,” comments Jensen Huang, founder & CEO of NVIDIA. “Coherent has been an important NVIDIA partner for more than two decades, and its expanded InP manufacturing in Texas will help strengthen the US supply chain for the AI infrastructure the world is racing to build.”
Coherent says that, together, the proposed CHIPS award, NVIDIA partnership, and Sherman expansion position it to help meet accelerating demand for AI infrastructure while strengthening America’s role in the global supply chain for advanced photonics, optical networking, and next-generation computing technologies.
