NVIDIA (NVDA), Coherent (COHR) Break Ground on Texas InP Factory for AI Optical Backbone

NVIDIA (NVDA) CEO Jensen Huang joined Coherent (COHR) CEO Jim Anderson on June 16, 2026, for a groundbreaking ceremony at Coherent's expanded factory in Sherman, Texas. The facility will produce 6-inch Indium Phosphide (InP) wafers and optical interconnect components, crucial for the "optical backbone" of modern AI infrastructure, addressing physical bottlenecks in data transfer for large-scale AI systems. InP materials convert electrical signals into light, enabling high-speed, energy-efficient data transmission over hundreds of feet in data centers, critical over traditional copper. Coherent operates the world's first mass-production 6-inch InP wafer fab, which increases usable area by approximately four times, boosting output and reducing unit costs. The project receives substantial funding, including NVIDIA's $2 billion strategic investment in Coherent made in March 2026, along with multi-billion dollar procurement commitments. Additional support comes from $50 million via the U.S. CHIPS Act and about $17 million from Texas state and local agencies. The factory projects over 550 direct jobs.