Coherent breaks ground on expanded Texas fab for AI optical interconnects; secures $50M CHIPS Act grant

Coherent broke ground on an expanded manufacturing facility in Sherman, Texas focused on 6-inch indium phosphide wafers. The company announced a $50 million CHIPS Act grant to support the facility expansion, building on $17 million from the Texas CHIPS program and Sherman Economic Development Corporation. The expanded site is expected to support over 550 direct jobs when at full capacity.

Indium phosphide (InP) is a compound semiconductor used for high-speed lasers, optical transceivers, and silicon photonics that interconnect large GPU clusters across data centers. As AI systems grow in scale—NVIDIA's Vera Rubin Ultra NVL576 links 576 GPUs across 8 racks—copper interconnects become power-inefficient, making optical solutions essential. Coherent's 6-inch wafer process quadruples usable area compared to 3-inch production, significantly reducing per-component cost.

This reflects NVIDIA's broader $2 billion strategic investment in Coherent announced in March, alongside a multibillion-dollar purchase commitment for advanced photonics products. NVIDIA CEO Jensen Huang emphasized at the groundbreaking that 'distance is nearly free' once optical infrastructure is deployed at scale, making it the power-optimal solution for hyperscale AI buildouts.

For architects planning large inference clusters, optical networking has moved from niche to critical infrastructure. Domestic InP supply chains were historically thin and overseas-focused; the Sherman fab represents a strategic shift toward U.S.-based supply security for the optical backbone of the AI era. The facility's ramp timeline will directly affect data center interconnect density and thermal budgets in 2027–2028 deployments.