Coherent & NVIDIA Break Ground at Texas Semiconductor Site

Coherent has broken ground on its 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.

The expanded facility is intended to scale production of the same InP wafers that carry data between chips, servers and data centres at the speed of light. 

In March of 2026, NVIDIA announced it was investing US$2bn in Coherent to expand supply, deepen R&D and advance US-based manufacturing.

The Sherman facility

Coherent’s site in Sherman is a 6-inch Indium Phosphide (InP) semiconductor manufacturing facility.

It builds compound indium phosphide semiconductors, which are the materials behind the high-speed networking and optical interconnects that AI runs on. 

“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 reindustrialising the United States,” NVIDIA CEO, Jensen Huang, said at the groundbreaking event. 

At project completion, the Sherman site is expected to create more than 1,000 jobs, including more than 550 direct advanced manufacturing, engineering and technical roles. 

Expanded manufacturing

At the groundbreaking event, Coherent announced a US$50m CHIPS Act grant to help finance the expanded Sherman facility, building on roughly US$17m in earlier support from the Texas CHIPS program and the Sherman Economic Development Corporation.

The expansion will add advanced wafer fabrication equipment and cleanroom capacity to increase production of InP-based photonic devices at scale.

Coherent says the expansion will double manufacturing production space and quadruple wafer production capacity, significantly increasing domestic production of critical AI-enabling technologies and reinforcing American leadership in the technologies that power the AI economy.

“Today marks an important milestone, not just for Coherent, but for American manufacturing and for the future of AI infrastructure,” Coherent CEO Jim Anderson said at the event. 

How NVIDIA use Coherent's compound semiconductors 

To connect hundreds of thousands of processors separated by hundreds or thousands of feet across a data centre, the only way to solve that problem is silicon photonics, Huang explained at the event.

For example, 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.

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 centre would rather spend on compute.

NVIDIA says that at the scale of its NVL576, light is the most power-efficient option. It has worked with Coherent for nearly two decades. 

Jensen said: “AI factories are the infrastructure of the new industrial revolution. Connecting millions of GPUs into one thinking machine requires optical technology built for scale, speed and energy efficiency.

"Coherent has been an important NVIDIA partner for more than two decades, and its expanded InP manufacturing in Texas will help strengthen the US supply chain for the AI infrastructure the world is racing to build."