Coherent to Expand Texas Plant with Up to $33 Million in Federal Funds
SHERMAN, Texas – Coherent Corp., a key player in optoelectronic devices, has entered into a preliminary agreement with the U.S. Department of Commerce for a potential $33 million investment. This funding, part of the CHIPS and Science Act, is earmarked for the modernization and expansion of Coherent’s manufacturing facilities in Sherman, Texas.
The investment aims to enhance the world’s first 150 mm indium phosphide (InP) manufacturing line. The expansion includes the installation of advanced wafer fabrication equipment to scale up the production of InP devices. These devices are essential components in various sectors, including data communication, consumer electronics, and the automotive industries, where they are used for AI infrastructure and advanced sensing applications.
Coherent’s Chief Strategy Officer, Dr. Giovanni Barbarossa, expressed enthusiasm for the partnership with the Department of Commerce and local entities, highlighting the project’s potential to bolster Coherent’s industry position in InP technology. The expansion is expected to generate approximately 70 direct jobs, contributing to the local economy and reinforcing the semiconductor supply chain in the United States.
Senator John Cornyn underscored the strategic importance of this investment, noting its role in strengthening national security, enhancing global competitiveness, and reclaiming U.S. leadership in semiconductor manufacturing.
The CHIPS for America initiative within the National Institute of Standards and Technology (NIST) supports manufacturing incentives and R&D programs to advance the semiconductor industry in the U.S.
Coherent, with a broad presence in research and development and manufacturing, serves various markets with its technologies. The proposed funding is a step towards securing semiconductor supply chains and advancing U.S. technological leadership.
This expansion project is based on a press release statement from Coherent Corp. and reflects the company’s plans to upgrade and expand its Sherman facility, pending final agreements and funding allocation. While the company reported losses in recent quarters, analysis indicates positive momentum ahead, with analysts projecting profitability this year.
In other recent news, Coherent Corp. has been the focus of several analyst upgrades and corporate developments. Jefferies initiated coverage of Coherent with a Buy rating, citing the potential for growth under new CEO Jim Anderson. Meanwhile, Citi also upgraded Coherent to a Buy, setting a new price target of $136.00, reflecting a positive view of the company’s future financial performance.
In terms of corporate developments, Coherent’s shareholders approved an amended incentive plan and elected Class One Directors at their recent Annual Meeting. The company also reported its first-quarter results for fiscal year 2025 and shared its projections for the second quarter.
These recent developments reflect the ongoing efforts of Coherent to streamline operations and strengthen its financial position. However, it is important to note that these are projections and actual results may vary. The company has acknowledged potential risks that could cause actual results to differ from projections.
Investors are encouraged to consider the risk factors outlined in Coherent’s SEC filings when evaluating the company’s projections.
