Coherent Breaks Ground on Texas InP Fab

Coherent broke ground on an expanded indium phosphide wafer fab in Sherman, Texas, with NVIDIA CEO Jensen Huang and Coherent CEO Jim Anderson attending the June 16 ceremony. The facility, supported by a $50 million CHIPS Act award and $17 million in Texas incentives, will scale production of 6-inch InP wafers for optical interconnects used in AI data centers. NVIDIA has made multibillion-dollar photonics commitments, including a reported $2 billion investment in Coherent, to build a domestic supply chain for AI clusters.

Coherent Breaks Ground on Texas InP Fab Coherent broke ground on an expanded indium phosphide InP wafer fab in Sherman, Texas, the company and NVIDIA reported at a June 16 ceremony attended by NVIDIA CEO Jensen Huang and Coherent CEO Jim Anderson, according to NVIDIA's corporate blog. NVIDIA and trade coverage describe the site as a volume-production 6-inch InP facility that will scale lasers, optical components and compound semiconductors used for data-center optical interconnects. Multiple outlets report the expansion is reported to be supported by a $50 million CHIPS Act award reported as a Letter of Intent plus roughly $17 million in prior Texas-level incentives, and trade reporting and newsletters note NVIDIA has made multibillion-dollar photonics commitments including a reported $2 billion investment in Coherent, per AI Weekly and The Next Web. AI Weekly additionally reports the CHIPS award is a Letter of Intent requiring a separate binding funding agreement. What happened Coherent broke ground on an expanded manufacturing building at its Sherman, Texas, campus, according to NVIDIA's corporate blog and company coverage in trade press. 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, and NVIDIA quoted Huang saying, "AI is the ultimate general-purpose technology," in the company blog post. Multiple outlets report the expansion is reported to be supported by a $50 million CHIPS Act award reported as a Letter of Intent and roughly $17 million in prior Texas-level support, per Wccftech and AI Weekly. 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. Technical details 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. Context and significance 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 currently reported as 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. Editorial analysis Industry context: Companies building optical interconnect capacity for hyperscale AI typically require coordinated capital, procurement commitments and domestic fabrication to achieve production scale. Observers have noted that procurement-led industrial policy, where large cloud and AI buyers commit purchase volumes, accelerates capacity buildout but also concentrates supply dependencies in specific fabs and regions. For practitioners, this means supply-chain visibility and procurement timelines will be important when planning large, optics-dependent cluster builds. What to watch Indicators include whether the $50 million CHIPS Act award moves from a Letter of Intent 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. Reported employment and capacity metrics, for example the floor-space expansion and projected wafer throughput figures cited in trade newsletters, will be signals of when optical component availability could relieve copper-related bandwidth constraints for dense GPU clusters. Reported sources NVIDIA corporate blog, Wccftech coverage, The Next Web, AI Weekly and trade reporting compiled in industry outlets provided the facts above. Scoring Rationale This is a notable infrastructure development that materially affects supply for optical interconnects used in large GPU clusters. It matters to practitioners planning optics-dependent deployments and to procurement and supply-chain teams, but it is not a frontier research breakthrough. Practice interview problems based on real data 1,500+ SQL & Python problems across 15 industry datasets — the exact type of data you work with. Try 250 free problems /problems