Coherent Breaks Ground on Expanded Texas Facility to Scale AI's Optical Infrastructure

Coherent Corporation held a groundbreaking ceremony on June 16, 2026, for an expanded manufacturing facility in Sherman, Texas, marking a significant milestone in scaling the optical components essential to AI infrastructure. The facility will produce indium phosphide wafers and optical components that form the backbone of modern AI data centers, enabling high-speed data transmission between chips, servers and systems across vast distances.

NVIDIA founder and CEO Jensen Huang and Coherent CEO Jim Anderson led the ceremony, joined by Sherman Mayor Shawn Temann and Adriana Cruz, executive director of Texas Economic Development and Tourism. Huang emphasized AI's role as a fundamental technology affecting every industry, underscoring the importance of domestic semiconductor manufacturing. Coherent announced a $50 million grant from the CHIPS Act to finance the expanded facility, building on approximately $17 million in earlier support from the Texas CHIPS program and the Sherman Economic Development Corporation.

The expansion reflects broader industry recognition that optical interconnects, rather than traditional copper connections, are essential for connecting large-scale AI systems. At the scale of NVIDIA's Vera Rubin Ultra NVL576—which links 576 GPUs across eight racks—copper cannot efficiently carry signals across the required distances without excessive power consumption. Silicon photonics and optical interconnects solve this challenge, offering nearly distance-free signal transmission once the initial conversion penalty is paid.

NVIDIA and Coherent have collaborated for approximately two decades, deepening their partnership in March 2026 with a multiyear strategic agreement. NVIDIA committed $2 billion in investment to Coherent to support research and development, future manufacturing capacity, and U.S.-based operations, alongside a multibillion-dollar purchase commitment for advanced laser and optical networking products. NVIDIA separately committed to investing up to $500 billion in U.S. AI infrastructure through industry partnerships and new facilities in Arizona and Texas.

The Sherman facility, located an hour north of Dallas in a city of approximately 45,000 people, will create more than 550 direct jobs at full capacity, with thousands of additional indirect jobs. The expansion underscores a shift in AI infrastructure development toward domestic manufacturing of critical optical components and compound semiconductors that have historically relied on thin domestic supply chains. The facility will produce lasers, transceivers and pluggable optical modules that enable data movement across NVIDIA networking infrastructure.