Coherent Breaks Ground on Expanded Texas Facility, Scaling AI's Optical Backbone

Coherent's expansion at its Sherman, Texas, campus scales what it calls the world's first volume production 6-inch indium phosphide fab, a key supplier across NVIDIA's AI stack. More and more, that light is made in Texas. Coherent broke ground today on an expanded manufacturing building in Sherman, Texas.

The company makes the lasers, optical components and compound semiconductors that wire AI systems together - and runs what it calls the world's first 6-inch indium phosphide fab. NVIDIA founder and CEO Jensen Huang and Coherent CEO Jim Anderson were on hand for the ceremony, joined by Sherman Mayor Shawn Temann and Adriana Cruz, executive director of Texas Economic Development and Tourism, who delivered remarks. The expanded building will scale production of the same InP wafers that carry data between chips, servers and data centers at the speed of light - the optical backbone of modern AI infrastructure.

It's the kind of milestone that turns a commitment into construction: a concrete step in expanding advanced semiconductor manufacturing in the United States. "AI is the ultimate general-purpose technology," Huang said during a conversation with Anderson at the groundbreaking. "Because intelligence is fundamental - the ability to process information, to reason and solve problems - it affects every single industry.

" Public programs like the CHIPS Act, funded at roughly $50 billion, were designed to bring chip manufacturing back to the U. As part of today's event, Coherent is announcing a $50 million CHIPS Act grant to help finance the expanded Sherman facility - building on roughly $17 million in earlier support from the Texas CHIPS program and the Sherman Economic Development Corporation. NVIDIA's own commitment to produce up to $500 billion of AI infrastructure in the U.

through industry partnerships with new sites in Arizona and Texas adds private-sector momentum. "Coherent is a world-class company, and the work you do is vital to our future, vital to the future of artificial intelligence and vital to reindustrializing the United States," Huang said. Compound semiconductors like indium phosphide and gallium arsenide - the materials behind the high-speed networking and optical interconnects that modern AI runs on - don't get the headlines that logic chips do.

But their domestic supply chains have been thin for years. Today's event was an argument that the gap is closing. When 576 GPUs span eight racks and operate as a single system - as they will in NVIDIA Vera Rubin Ultra NVL576, which links eight NVLink racks of 72 NVIDIA Rubin Ultra GPUs into one 576-GPU domain - copper can't carry the signal across that distance.

To connect hundreds of thousands of processors separated by hundreds or thousands of feet across a data center, the only way to solve that problem is silicon photonics, Huang explained. As signaling rates climb, the reach of a metal trace shrinks, and spanning eight racks in copper would burn power on retimers and signal conditioning that a data center would rather spend on compute. Optics pays a one-time penalty to move from electrical to light, but once paid, distance is nearly free.

At NVL576 scale, light is the most power-efficient option. NVIDIA and Coherent aren't new to each other - they've worked together for roughly two decades. In March, they deepened the relationship into a multiyear strategic partnership: NVIDIA is investing $2 billion in Coherent to support R&D, future capacity and U.

-based manufacturing, alongside a multibillion-dollar purchase commitment for advanced laser and optical networking products. Sherman, a city of roughly 45,000 people an hour north of Dallas, has become the latest dateline for the AI era - emblematic of a boom built as much on picks, shovels and manufacturing muscle as on software. "When we get to full capacity, this site will support more than 550 direct jobs - and thousands of jobs, direct and indirect," Anderson said.