Coherent expands – Coherent broke ground on an expanded advanced semiconductor manufacturing facility in Sherman, Texas, positioning its 6-inch indium phosphide production to support the optical backbone of AI data centers. The ceremony brought NVIDIA founder Jensen Huang and Co
By the time Jensen Huang stepped into the Sherman, Texas factory floor for the groundbreaking, the promise sounded almost physical: light, made in Texas, carrying data across the distances AI now demands.
Coherent broke ground today on an expanded manufacturing building in Sherman. The company makes lasers, optical components and compound semiconductors that wire AI systems together — including what it calls the world’s first 6-inch indium phosphide fab.
NVIDIA founder and CEO Jensen Huang and Coherent CEO Jim Anderson were on hand for the ceremony. Sherman Mayor Shawn Temann joined, as did Adriana Cruz, executive director of Texas Economic Development and Tourism, who delivered remarks.
The expanded building is meant to scale production of the same InP wafers that carry data between chips. servers and data centers at the speed of light — the optical backbone of modern AI infrastructure. Coherent framed the project as a turn from commitment into construction as advanced semiconductor manufacturing expands in the United States.
Huang, speaking during a conversation with Anderson at the groundbreaking, tied the investment to the broader reach of AI. “AI is the ultimate general-purpose technology,” Huang said. “Because intelligence is fundamental — the ability to process information, to reason and solve problems — it affects every single industry.”.
The push for domestic manufacturing has been backed by federal policy. Public programs like the CHIPS Act, funded at roughly $50 billion, were designed to bring chip manufacturing back to the U.S.
At today’s event, Coherent said it is announcing a $50 million CHIPS Act grant to help finance the expanded Sherman facility. That announcement builds on roughly $17 million in earlier support from the Texas CHIPS program and the Sherman Economic Development Corporation.
Private money is moving alongside public funding. NVIDIA’s own commitment to produce up to $500 billion of AI infrastructure in the U.S. — through industry partnerships with new sites in Arizona and Texas — added momentum to the message that more capacity is coming.
NVIDIA founder and CEO Jensen Huang and Coherent CEO Jim Anderson.
“Coherent is a world-class company, and the work you do is vital to our future, vital to the future of artificial intelligence and vital to reindustrializing the United States,” Huang said.
For years, compound semiconductors such as indium phosphide and gallium arsenide have sat in the background while logic chips captured the headlines. Coherent’s pitch is that their domestic supply chains, thin for years, are starting to catch up.
The reason optics is suddenly central comes down to scale — and to what copper can’t do anymore. When 576 GPUs span eight racks and operate as a single system. as they will in NVIDIA Vera Rubin Ultra NVL576 — linking eight NVLink racks of 72 NVIDIA Rubin Ultra GPUs into one 576-GPU domain — copper can’t carry the signal across that distance.
Huang explained that to connect hundreds of thousands of processors separated by hundreds or thousands of feet across a data center. silicon photonics is the only way to solve the problem. As signaling rates climb. the reach of a metal trace shrinks. and spanning eight racks in copper would burn power on retimers and signal conditioning that a data center would rather spend on compute.
Optics, by contrast, pays a one-time penalty to move from electrical to light — but once that conversion is made, distance is nearly free. At NVL576 scale, light is the most power-efficient option.
NVIDIA and Coherent aren’t new partners. The two have worked together for roughly two decades. In March. they deepened their relationship into a multiyear strategic partnership: NVIDIA is investing $2 billion in Coherent to support R&D. future capacity and U.S.-based manufacturing. alongside a multibillion-dollar purchase commitment for advanced laser and optical networking products.
Sherman — a city of roughly 45,000 people an hour north of Dallas — has become one of the new datelines for the AI era. The city’s growth is built on manufacturing muscle as much as it is on software.
When Anderson spoke at the ceremony, he put the workforce impacts in direct terms. “When we get to full capacity, this site will support more than 550 direct jobs — and thousands of jobs, direct and indirect,” Anderson said.
What the factory ships isn’t a single part dropped into a single slot. It’s the lasers, transceivers and pluggable optical modules that move data across NVIDIA networking — each enabling a different part of the system.
“As AI systems grow larger and more powerful, connectivity is just as important as compute,” Anderson said. “AI runs on compute, but it scales on connectivity — and Sherman is where that connective tissue gets built.”
The day also showed what “connective tissue” looks like in practice. Before the groundbreaking. guests toured the existing fab and previewed equipment that will populate the expanded building once it’s running. An NVIDIA rack stood on the factory floor as one of the six stops on the tour. A fireside chat with Huang and Anderson followed. with both CEOs discussing the partnership and what scaling domestic optical manufacturing means for the AI buildout ahead.
“Today marks an important milestone — not just for Coherent, but for American manufacturing and for the future of AI infrastructure,” Anderson said.
Coherent’s story about domestically made lasers traces back further than the current AI boom. The semiconductor laser was born in U.S. labs — Bell Labs demonstrated a room-temperature version in 1970 — before the technology and its manufacturing largely migrated overseas.
“We were founded as a manufacturing company in 1971. We’ve always been a U.S. manufacturing company — and after 50 years, the most advanced 6-inch indium phosphide line in the world is right here in Sherman,” Anderson said.
That manufacturing gap shows up in the wafers. While silicon fabs run on 12-inch wafers, Coherent says most of the world’s InP production is still stuck on 3- and 4-inch wafers — lower yields and far fewer components per run.
Moving to 6-inch wafers, the company said, roughly quadruples the usable area of a 3-inch wafer because area scales with the square of the diameter. That lowers cost and supports the volume the AI buildout demands.
Huang described the speed of the ramp. “It took 50 years to build the first line,” Huang said, “and in one year, they’ve quadrupled it,” framing that change as a response to demand for accelerated computing.
Inside the facility, Coherent said the core processes are familiar: lithography, photoresist, depositing and etching materials, layer by layer. The difference is the material. On an InP substrate. engineers grow compound-semiconductor layers and tune them for precise optical properties — the physics that lets a chip emit and modulate light.
Today, that InP travels inside Coherent’s pluggable optics. The transceivers — described as being about the size of a USB stick — plug into the front of NVIDIA networking switches and move data between racks across the data center floor where copper can’t reach. Each module carries an indium phosphide laser.
Those same modules now help enable NVIDIA Spectrum-X Photonics and Quantum-X Photonics switches with co-packaged optics. Coherent supplies the external laser module that plugs into the switch’s front plate.
As NVIDIA tries to prevent optics from becoming the next bottleneck, demand for those lasers is expected to keep rising.
Looking beyond the factory floor, Huang connected AI’s infrastructure buildout to national priorities. “Ten years from now. I think we’ll look back and realize AI is what made it possible to invest in sustainable energy. upgrade our energy grid and reconstitute a workforce. ” Huang said. “You can’t have only information workers in an economy — you also have to have builders. We have an opportunity over the next 10 years to reshape our communities and be much more balanced.”.
Coherent Sherman Texas CHIPS Act indium phosphide silicon photonics NVIDIA Vera Rubin Ultra NVL576 optical transceivers lasers compound semiconductors AI infrastructure