Coherent Announces a CHIPS Letter of Intent for $50 Million to Expand World-Leading Manufacturing Facility for AI Infrastructure

Rhea-AI Summary

Coherent (NYSE:COHR) signed a CHIPS Act letter of intent for up to $50 million from the U.S. Department of Commerce to expand its 6-inch Indium Phosphide fab in Sherman, Texas.

The project is expected to double production space, quadruple wafer capacity, and create over 1,000 jobs, supporting growing AI datacenter optical networking demand and deepening Coherent’s long-term partnership with NVIDIA. The award complements about $20 million of prior Texas and local incentives.

Positive

• Letter of intent for up to $50 million in CHIPS Act funding
• Sherman expansion expected to create more than 1,000 jobs
• Manufacturing space to double and wafer capacity to quadruple
• Additional ~$20 million support from Texas and Sherman authorities
• Strengthened long-term technology partnership with NVIDIA
• Expanded U.S.-based capacity for AI optical networking components

Negative

• None.

News Market Reaction – COHR

-7.50%

31 alerts

-7.50% Session close to close

+2.3% Peak Tracked

-2.1% Trough Tracked

$76.32B Market Cap

0.4x Rel. Volume

In the Jun 16 session, COHR declined 7.50%, reflecting a notable negative market reaction. Argus tracked a peak move of +2.3% during that session. Argus tracked a trough of -2.1% from its starting point during tracking. Our momentum scanner triggered 31 alerts that day, indicating elevated trading interest and price volatility.

Data tracked by StockTitan Argus on the day of publication.

Market Context

The stock moved -7.5% in the session following this news. A negative reaction despite positive CHIPS...

Analysis

The stock moved -7.5% in the session following this news. A negative reaction despite positive CHIPS news would fit prior instances where upbeat AI announcements saw selling pressure. Historical AI-tagged events showed an average move of only 1.09%, with some declines after product launches. Any sharp drop could reflect profit-taking after a strong run toward the $440 52-week high or concerns about execution risk on the Sherman expansion, rather than the headline itself.

Key Figures

CHIPS funding LOI: up to $50 million Stock move: 7.48% New jobs total: more than 1,000 jobs +5 more

8 metrics

CHIPS funding LOI up to $50 million Direct funding under CHIPS and Science Act for Sherman InP expansion

Stock move 7.48% Price change over prior 24 hours before/into this news

New jobs total more than 1,000 jobs Expected total employment impact at Sherman site after expansion

Advanced roles more than 550 roles Direct advanced manufacturing, engineering, and technical positions

Wafer capacity 4x capacity Planned increase in wafer production capacity at Sherman InP facility

Floor space 2x production space Planned doubling of manufacturing production space at Sherman

Prior local support approximately $20 million Texas Semiconductor Innovation Fund and Sherman Economic Development support

NVIDIA partnership length more than two decades Duration of Coherent’s collaboration with NVIDIA

Previous AI Reports

5 past events · Latest: Apr 09 (Positive)

Same Type Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Apr 09	SiC epitaxy advance	Positive	+8.2%	Announced SiC thick epitaxy enabling high-voltage power devices up to 10 kV.
Mar 17	AI optics showcase	Positive	-0.6%	Planned unveiling of AI-scale optical innovations and leadership at OFC 2026.
Mar 04	AI TIA launch	Positive	-7.6%	Launched 224Gbps quad TIA for 800G/1.6T optical transceivers in AI infrastructure.
Feb 17	AI forum participation	Positive	+1.8%	Executives featured at Optica Executive Forum on future of AI networking.
Dec 03	SiC platform expansion	Positive	+3.7%	Expanded to next-gen 300mm SiC platform for AI datacenter infrastructure demand.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

AI-tagged announcements often trigger notable moves, with a mix of strong gains and occasional selloffs on otherwise positive technology updates.

Recent Company History

Over the past several months, Coherent has repeatedly highlighted its role in AI infrastructure. AI-tagged news on Dec 3, 2025 detailed expansion of a 300mm silicon carbide platform, followed by multiple 2026 releases around AI networking, including a 224Gbps quad TIA and AI-scale optical innovations at OFC 2026. An April 2026 update on SiC thick epitaxy for up to 10 kV power devices also drew attention. Today’s CHIPS-backed InP expansion in Sherman fits this pattern of scaling manufacturing to meet accelerating AI datacenter demand.

Key Terms

chips and science act, indium phosphide (inp), semiconductor, optical networking, +4 more

8 terms

chips and science act regulatory

"to receive up to $50 million in direct funding under the CHIPS and Science Act from"

A federal law that provides large-scale government funding and incentives to boost domestic semiconductor manufacturing, related research, and broader science and technology programs. It matters to investors because the law changes where companies build factories, who gets subsidies, and which industries attract new private investment—similar to a city offering tax breaks to bring in factories, it can shift profits, capital spending and competitive positions across supply chains.

indium phosphide (inp) technical

"6-inch Indium Phosphide (InP) semiconductor manufacturing facility in Sherman, Texas."

Indium phosphide (InP) is a crystalline semiconductor material used to make electronic and photonic components that handle very fast signals and light, such as lasers, optical fibers, and high-speed communication chips. Think of it as a specialized building material for devices that transmit and process data with light instead of just electrons. Investors care because InP’s supply, cost, and technological role affect makers of telecom, data-center, and specialty electronics components, influencing revenue, margins, and competitive advantage.

semiconductor technical

"Indium Phosphide (InP) semiconductor manufacturing facility in Sherman, Texas."

Semiconductors are materials and the tiny electronic components made from them that control the flow of electricity inside devices—think of them as the brains and traffic controllers of modern gadgets, cars, and industrial machines. They matter to investors because their production, supply and demand drive revenue, margins and capital spending across whole industries, so shortages or breakthroughs can quickly change company profits and stock prices.

optical networking technical

"American production of critical optical networking technologies that power next-generation AI datacenters"

Optical networking uses pulses of light sent through fiber-optic cables to move large volumes of data between computers, data centers and telecom equipment, functioning like high-speed highways for information. Investors care because growth in streaming, cloud services and mobile networks drives demand for these high-capacity links and the gear and services that support them, influencing revenue growth, recurring service income and capital-spending cycles for suppliers and operators.

datacenters technical

"optical networking technologies that power AI datacenters and further strengthen Coherent’s"

Datacenters are specialized facilities that house rows of computers and networking equipment that store, process and route digital information for businesses and consumers; they include backup power, cooling and security to keep those machines running reliably. Investors care because datacenters power cloud services, streaming, e‑commerce and corporate IT, so their capacity, efficiency and costs can drive recurring revenue, capital investment needs and energy exposure — think of them as the power plants and warehouses of the digital economy.

wafer technical

"quadruple wafer production capacity, significantly increasing domestic production of critical"

A wafer is a thin, round slice of semiconductor material used as the base for making computer chips and other electronic components, like a pancake or cookie dough from which many finished products are cut. Investors pay attention to wafer production because the quantity, quality and cost of wafers determine how many chips a company can sell, how fast it can scale, and how capital spending, supply shortages or manufacturing improvements will affect revenue and profit margins.

cleanroom technical

"The expansion will add advanced wafer fabrication equipment and cleanroom capacity to increase"

A cleanroom is a tightly controlled workspace where air, particles, microbes, temperature and humidity are kept within strict limits to prevent contamination during manufacturing, testing or research—commonly used for pharmaceuticals, biotech, medical devices and semiconductors. Investors care because a well-designed and operated cleanroom reduces product defects, supports regulatory approval and enables reliable scale-up; think of it as a sterile kitchen that protects delicate recipes, lowering recall risk and helping preserve revenue and margins.

supply chain technical

"expansion will strengthen domestic supply chain resilience and expand U.S.-based manufacturing"

A supply chain is the series of steps involved in producing and delivering a product or service, from raw materials to the final customer. It includes all the processes, such as sourcing materials, manufacturing, and distribution, that ensure products reach consumers. For investors, understanding the supply chain helps gauge how efficiently a company can meet demand and manage costs, impacting its profitability and stability.

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Proposed award will support new manufacturing jobs and expanded American production of critical optical networking technologies that power next-generation AI datacenters

SHERMAN, Texas, June 16, 2026 (GLOBE NEWSWIRE) -- Coherent Corp. (NYSE: COHR), the global photonics leader, today announced it has signed a letter of intent to receive up to $50 million in direct funding under the CHIPS and Science Act from the U.S. Department of Commerce to expand its world-leading 6-inch Indium Phosphide (InP) semiconductor manufacturing facility in Sherman, Texas.

The investment will support growing demand for optical networking technologies that power AI datacenters and further strengthen Coherent’s longstanding and recently expanded partnership with NVIDIA. At project completion, the Sherman site is expected to create more than 1,000 jobs, including more than 550 direct advanced manufacturing, engineering, and technical roles. The expansion will double manufacturing production space and quadruple wafer production capacity, significantly increasing domestic production of critical AI-enabling technologies and reinforcing American leadership in the technologies that power the AI economy.

The CHIPS award builds upon approximately $20 million in support previously provided through the Texas Semiconductor Innovation Fund and the Sherman Economic Development Corporation.

The announcement coincides with a groundbreaking ceremony to be held later today with NVIDIA, federal and state officials, and local community leaders at Coherent’s Sherman facility. Together, the proposed CHIPS investment, NVIDIA partnership, and Sherman expansion underscore the increasingly vital role of photonics innovation in enabling AI infrastructure, advanced manufacturing, and American technology leadership.

“AI is transforming our world and driving a new era of American manufacturing to build the infrastructure that will power the AI datacenters of the future,” said Jim Anderson, Chief Executive Officer of Coherent. “Semiconductor photonic devices are essential building blocks of AI infrastructure, enabling the high-speed connectivity required to move unprecedented amounts of data between processors, memory, and systems. This investment expands America’s capacity to manufacture critical AI-enabling technologies, creates high-value jobs, and reinforces U.S. leadership in advanced manufacturing, photonics, and innovation. We thank our partners at NVIDIA, Secretary Lutnick, Bill Frauenhofer and the CHIPS Program Office team, Governor Abbott, Adriana Cruz and the Texas Semiconductor Innovation Fund, and Kent Sharp and the Sherman Economic Development Corporation for their continued support as we invest in expanded capacity and future growth.”

Expanding the Foundation of AI Infrastructure
Coherent’s Sherman facility manufactures photonic devices based on InP, a specialized semiconductor material used to create high-performance optical networking components that power modern AI systems.

The site is home to the world’s first and largest volume-production 6-inch InP manufacturing platform, providing the scale needed to support rapidly growing demand for AI-driven optical interconnect technologies. As AI workloads continue to scale, these technologies are becoming increasingly critical to overcoming data movement bottlenecks and enabling higher-performance, more energy-efficient computing architectures.

The expansion will add advanced wafer fabrication equipment and cleanroom capacity to increase production of InP-based photonic devices at scale, reinforcing Sherman’s position as one of the world’s leading centers for optical networking innovation and production.

Strengthening U.S. Manufacturing Leadership
Coherent’s expansion will strengthen domestic supply chain resilience and expand U.S.-based manufacturing capacity for strategically important semiconductor and photonics technologies.

“Indium phosphide photonics are essential for enabling high-speed data transmission within AI systems, telecommunications, and advanced networks,” said Bill Frauenhofer, Executive Director for Semiconductor Investment and Innovation at the Department of Commerce. “The CHIPS incentives will expand production capability, strengthen the U.S. semiconductor supply chain, and accelerate the next generation of critical optical technologies.”

Partnership Driving Future Growth
Coherent and NVIDIA have worked together for more than two decades to advance technologies that support increasingly demanding compute and networking architectures. The Sherman expansion reflects the growing importance of American manufacturing capacity, resilient supply chains, and photonics innovation as AI systems continue to scale.

“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," said Jensen Huang, founder and CEO of NVIDIA. "Coherent has been an important NVIDIA partner for more than two decades, and its expanded InP manufacturing in Texas will help strengthen the U.S. supply chain for the AI infrastructure the world is racing to build."

Together, the proposed CHIPS award, NVIDIA partnership, and Sherman expansion position Coherent to help meet accelerating demand for AI infrastructure while strengthening America’s role in the global supply chain for advanced photonics, optical networking, and next-generation computing technologies.

About Coherent
Coherent is the global photonics leader. We harness photons to drive innovation. Industry leaders in the datacenter, communications, and industrial markets rely on Coherent’s world leading technology to fuel their own innovation and growth. Founded in 1971 and operating in more than 20 countries, Coherent brings the industry’s broadest, deepest technology stack; unmatched supply chain resilience; and global scale to help its customers solve their toughest technology challenges. For more information, please visit us at coherent.com.

Media Contact
Stacey Keegan
Vice President, Corporate Communications
stacey.keegan@coherent.com

FAQ

What CHIPS Act funding did Coherent (COHR) announce on June 16, 2026?

Coherent announced a letter of intent for up to $50 million in CHIPS Act funding. According to Coherent, this proposed award will help expand its 6-inch Indium Phosphide semiconductor manufacturing facility in Sherman, Texas, focused on AI datacenter optical networking technologies.

How will Coherent’s Sherman, Texas expansion impact AI datacenter infrastructure?

Coherent’s Sherman expansion aims to boost production of optical components used in AI datacenters. According to Coherent, the project will double manufacturing space, quadruple wafer capacity, and increase domestic output of Indium Phosphide photonic devices for high-speed AI data connectivity.

How many jobs will Coherent’s Sherman AI manufacturing project create?

Coherent expects its Sherman expansion to create more than 1,000 jobs. According to Coherent, over 550 of these roles will be direct advanced manufacturing, engineering, and technical positions supporting Indium Phosphide photonic device production for AI, telecom, and advanced networks.

What is the role of NVIDIA in Coherent’s CHIPS-backed Sherman expansion?

NVIDIA is a long-term technology partner supporting Coherent’s Sherman expansion. According to Coherent, the expanded Indium Phosphide manufacturing will help supply optical technologies needed to connect millions of GPUs in AI factories and strengthen the U.S. AI infrastructure supply chain.

How much non-CHIPS support has Coherent received for the Sherman AI facility?

Coherent has previously received about $20 million in support for its Sherman site. According to Coherent, this funding came from the Texas Semiconductor Innovation Fund and the Sherman Economic Development Corporation, complementing the proposed CHIPS Act award for further expansion.

Why is Indium Phosphide important to Coherent’s AI infrastructure strategy?

Indium Phosphide enables high-performance photonic devices used in optical networking for AI systems. According to Coherent, its Sherman facility runs the world’s first and largest 6-inch InP production platform, critical for scaling bandwidth and energy-efficient data movement in AI datacenters.