Coherent (COHR) Secures $50M CHIPS Act Grant to Quadruple Indium Phosphide Capacity in Texas

Coherent Corp. (COHR-US) signed a Letter of Intent with the U.S. Department of Commerce on June 16, 2026, securing up to $50 million in direct CHIPS and Science Act funding to expand its 6-inch indium phosphide (InP) semiconductor facility in Sherman, Texas. The investment targets surging demand for high-speed optical communications driven by AI data center buildouts. The expansion will quadruple wafer production capacity and double manufacturing floor space at the Sherman site, which currently produces InP components for optical transceivers. Coherent projects the facility will create over 1,000 jobs, including 550+ advanced manufacturing and engineering positions. The company plans to complete a capacity-doubling milestone one quarter ahead of the original December 2026 target, with the full 4x expansion operational by end-2027. Indium phosphide enables lasers and photodetectors critical for data center interconnects. Analysts forecast Coherent's revenue to grow at a 33.46% CAGR from 2025-2029, with the Sherman facility positioned as a key growth driver. The company vertically integrates InP components through co-packaged optics (CPO) and optical circuit switches, differentiating it from transceiver-only suppliers.