The Department of Commerce’s CHIPS Program Office has signed a letter of intent to provide up to $50 million in direct funding to Coherent Corp. under the CHIPS and Science Act.
According to the CHIPS Program Office, the proposed funding would support the expansion of Coherent’s facility in Sherman, Texas, which it describes as the first and largest high-volume 150mm indium phosphide semiconductor manufacturing facility in the United States.
The expansion would add wafer fabrication equipment and cleanroom capacity to increase production of indium phosphide-based photonic components. These components are used in high-speed optical interconnects that enable rapid data transfer within advanced AI data centres.
The Department of Commerce said the project would create high-skilled manufacturing jobs and strengthen domestic supply chains for critical photonics technologies that support next-generation computing and AI infrastructure.
Why does it matter?
The announcement highlights the growing importance of photonics technologies in the AI economy. As demand for AI computing continues to rise, data centres require increasingly efficient methods for transferring vast amounts of information between processors, servers and storage systems. Optical interconnect technologies based on indium phosphide semiconductors are becoming a critical part of that infrastructure.
The investment also reflects broader US industrial policy goals under the CHIPS and Science Act. Beyond traditional semiconductor manufacturing, policymakers are increasingly targeting specialised components and supply chains considered strategically important for AI competitiveness, economic security and technological resilience.
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