Coherent Secures $50M CHIPS Act Funding for Semiconductor Expansion

Key Facts

In a move reflecting U.S. efforts to bolster domestic semiconductor sovereignty, Coherent has signed a letter of intent to receive up to $50 million in direct funding under the U.S. CHIPS and Science Act. The funding is earmarked for the expansion of the company's Indium Phosphide semiconductor facility in Sherman, Texas. This expansion specifically aims to meet the surging demand for optical networking technologies in AI datacenters and supports Coherent's ongoing partnership with NVIDIA.

This government backing arrives as industry peers like Applied Materials and Lumentum race to secure AI-driven supply chains, with Applied Materials previously announcing multi-billion dollar research investments. Per market data, this funding strengthens Coherent's production roadmap relative to competitors, aligning with the broader trend of massive capital expenditure by hyperscalers on AI infrastructure.