Coherent Secures $50M CHIPS LOI to Expand InP Photonics Fab in Texas

Coherent Corp. announced it has signed a letter of intent for up to $50 million in direct funding from the U.S. Department of Commerce under the CHIPS and Science Act. The investment will expand its 6-inch Indium Phosphide (InP) semiconductor manufacturing facility in Sherman, Texas, doubling production space and quadrupling wafer capacity. The expansion, which builds on $20 million in state and local incentives, is expected to create over 1,000 jobs and supports Coherent's longstanding partnership with NVIDIA for AI datacenter optical networking components. CEO Jim Anderson framed the investment as critical to enabling high-speed connectivity for AI infrastructure.

This announcement sits at the intersection of two powerful market forces: the U.S. government's push to onshore advanced semiconductor manufacturing and the explosive demand for photonic interconnects driven by AI datacenter scaling. While not directly an additive manufacturing story, Coherent's InP photonics are the foundational laser and optical components that enable high-speed beam control and sensing in metal PBF-LB systems, DED platforms, and emerging laser-based AM processes. The Sherman facility's scale - the world's first volume-production 6-inch InP line - directly addresses a supply-chain bottleneck that has constrained Western AM OEMs reliant on domestic laser ecosystems. As Chinese laser suppliers increasingly localize their own photonics supply chains, this CHIPS-backed expansion strengthens the U.S. side of the laser-supply-to-metal-AM-OEM relationship graph, potentially improving lead times and qualification stability for domestic AM equipment builders.

From a practical standpoint, this is not an AM-specific funding event, but it reinforces the substrate on which industrial metal AM depends. Coherent must now execute on the capacity ramp and workforce build-out to convert the LOI into a binding award and actual production output. For AM OEMs and end-users, the signal is that U.S. photonics supply - a critical input for laser-based AM - is receiving structural government support, which may reduce one variable in the qualification-cost equation over the next 24-36 months. The NVIDIA partnership anchor also suggests that Coherent's production priorities will be shaped by AI datacenter demand first, with AM as a secondary but benefiting customer.