Coherent Secures $50M CHIPS Act Grant; Expands AI Optical Interconnect Manufacturing

<cite index="52-2">Coherent Corp. 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 world-leading 6-inch Indium Phosphide (InP) manufacturing operations</cite>. <cite index="52-1">The proposed award will support new manufacturing jobs and expanded American production of critical optical networking technologies that power next-generation AI datacenters</cite>.

<cite index="52-4">The 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</cite>. <cite index="51-3">InP-based photonic devices enable the high-speed optical interconnects that move data between processors, memory, and systems inside the world's most advanced AI data centers. 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</cite>.

<cite index="52-5">Coherent and NVIDIA have worked together for more than two decades to advance technologies that support increasingly demanding compute and networking architectures</cite>. <cite index="52-3">Together, the proposed CHIPS award, NVIDIA partnership, and Sherman expansion position Coherent 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</cite>.

This CHIPS grant complements the broader federal quantum and semiconductor incentive push: <cite index="59-2">The federal government structured CHIPS quantum awards as letters of intent, with the government receiving minority, non-controlling equity stakes in recipient companies</cite>. Coherent's grant focuses on photonic I/O, a critical bottleneck in high-performance AI clusters. For architects designing AI cluster interconnects or co-located GPU/TPU systems: optical I/O from InP-based devices is now receiving direct federal investment, signaling supply-chain consolidation around proven platforms. Coherent's NVIDIA partnership and 6-inch InP scale make it the de facto standard for HPC and AI data-center interconnect.

Coherent's award is part of a portfolio strategy to shore up U.S. semiconductor supply chains across multiple domains: analog photonics for interconnect, logic and memory at leading nodes (TSMC, Samsung), quantum hardware (Atom, Rigetti, PsiQuantum), and legacy node foundries. The $50M grant reflects recognition that optical I/O is a critical differentiator, not a commodity.