Coherent expands Sherman output for AI data centers

SHERMAN, Texas — Coherent broke ground June 16 on an expansion of its Sherman manufacturing facility that the company and its partners say will quadruple wafer production capacity for optical networking used in AI infrastructure. The expansion is a June announcement, not a new July project. SEDCO’s reposted Dallas Business Journal report put the project at $650 million and said Coherent would increase manufacturing space from 70,000 square feet to 140,000 square feet at its facility at 6800 S. U.S. 75. The report said the broader campus measures about 650,000 square feet. Coherent makes lasers, optical components and compound semiconductors. The Sherman site produces six-inch indium phosphide wafers, a semiconductor material used in high-performance optical networking components. KXII reported that the expansion will add wafer-fabrication equipment and cleanroom capacity. The project’s data-center relevance is directly described by the sources. NVIDIA said the wafers made in Sherman carry data between chips, servers and data centers, and that Coherent’s lasers, transceivers and pluggable optical modules move data across networking equipment. KXII likewise reported that the expansion will support optical networking technologies that help AI data centers move large amounts of information. The manufacturing expansion is supported by federal, state and local programs. NVIDIA reported that Coherent announced a $50 million CHIPS Act grant for the Sherman facility, building on roughly $17 million in earlier support from the Texas CHIPS program and SEDCO. The SEDCO-reposted Business Journal report described $50 million in federal CHIPS Act support and $20 million from Texas and SEDCO; KXII also described about $20 million in prior Texas and SEDCO support. Those accounts differ slightly on the earlier state and local support total, so the precise split should be confirmed with Coherent or the funding agencies. They agree that the company announced $50 million in CHIPS Act support and that the expansion will double manufacturing space and quadruple wafer output. NVIDIA CEO Jensen Huang and Coherent CEO Jim Anderson attended the June groundbreaking. NVIDIA reported that the companies have worked together for roughly two decades and expanded their relationship through a multiyear strategic partnership in March. The sources reviewed do not give an opening date for the expanded building.