Coherent Breaks Ground on Texas InP Fab

Coherent broke ground on an expanded manufacturing building at its Sherman, Texas, campus, according to NVIDIA's corporate blog and Coherent's official press release. NVIDIA's blog and Wccftech report the site will scale volume production of 6-inch indium phosphide (InP) wafers used for lasers, pluggable optics and compound-semiconductor optical components that link chips, servers and data centers. NVIDIA CEO Jensen Huang and Coherent CEO Jim Anderson attended the June 16 ceremony. Jensen Huang said in Coherent's official press release: "AI factories are the infrastructure of the new industrial revolution. Connecting millions of GPUs into one thinking machine requires optical technology built for scale, speed, and energy efficiency." Coherent's press release and trade coverage confirm the expansion is backed by a $50 million CHIPS Act award (a Letter of Intent requiring a separate binding funding agreement) plus approximately $20 million in prior Texas-level support from the Texas Semiconductor Innovation Fund and the Sherman Economic Development Corporation. Trade reporting compiled by The Next Web and AI Weekly places NVIDIA's aggregate photonics commitments at multiple billions, with AI Weekly reporting a $2 billion NVIDIA investment in Coherent and The Next Web estimating at least $6.5 billion in photonics investments across several suppliers. Coherent's press release states the completed expansion is expected to create more than 1,000 jobs and quadruple wafer production capacity.

The facility is described in NVIDIA's blog and trade coverage as the world's first volume-production 6-inch InP fab, moving from smaller wafer sizes to increase usable area per wafer. Media reporting links this capacity to optical interconnect use cases such as GPU clusters connecting hundreds of GPUs as a single system, for example NVIDIA's NVL576 576-GPU-style configurations cited in press coverage as an archetype that benefits from silicon photonics rather than traditional copper links. Reporting frames the technical argument as bandwidth and power limits at scale, with optical links offering higher bandwidth and lower incremental power per bit transmitted, per NVIDIA's explanatory notes quoted in trade articles.

Industry reporting from The Next Web and AI Weekly frames the Coherent expansion as part of a broader Nvidia-led effort to build a domestic photonics supply chain. The Next Web aggregates Nvidia investments across multiple vendors and materials suppliers, and AI Weekly highlights that the CHIPS Act award is a Letter of Intent that needs a binding funding agreement before funds disburse. Those reports also underscore concentration risk, noting Sherman's status as a leading US site for volume 6-inch InP production and the role that single facilities can play in optical component availability for large-scale AI cluster builds.

Companies building optical interconnect capacity for hyperscale AI typically require coordinated capital, procurement commitments and domestic fabrication to achieve production scale. Procurement-led industrial policy, where large AI buyers commit purchase volumes, accelerates capacity buildout but also concentrates supply dependencies in specific fabs and regions. For practitioners, supply-chain visibility and procurement timelines will be important when planning large, optics-dependent cluster builds.

Indicators include whether the $50 million CHIPS Act Letter of Intent converts to a signed, binding award, Coherent's published ramp schedule for wafer output, and how NVIDIA and other buyers formalize purchase agreements tied to the Sherman fab. Wafer throughput figures and facility floor-space expansion will signal when optical component availability could relieve copper-related bandwidth constraints for dense GPU clusters.