Coherent expands Texas optics plant for AI data centers

Coherent broke ground on an expanded manufacturing building in Sherman, Texas, to increase production of indium phosphide wafers used in lasers, optical components and compound semiconductors for AI data centers. The company says the site operates the world’s first 6-inch indium phosphide fab, a line aimed at producing the optical components that move data between chips, servers and racks.

NVIDIA CEO Jensen Huang and Coherent CEO Jim Anderson attended the ceremony with local and state officials. Coherent announced CHIPS Act grant support for the project, adding to backing from the Texas CHIPS program and the Sherman Economic Development Corporation, while NVIDIA’s partnership with Coherent includes investment, R&D support and purchase commitments for advanced laser and optical networking products.

The expansion targets a bottleneck in large AI systems, where copper becomes less efficient as distances and signaling rates increase. Huang pointed to NVIDIA Vera Rubin Ultra NVL576, which links eight NVLink racks of 72 NVIDIA Rubin Ultra GPUs into one 576-GPU domain, as an example of why silicon photonics and optical interconnects are becoming central to data center design.

Anderson said the Sherman site will support more than 550 direct jobs at full capacity. The factory will ship lasers, transceivers and pluggable optical modules used across NVIDIA networking, including external laser modules for NVIDIA Spectrum-X Photonics and Quantum-X Photonics switches with co-packaged optics.