$50m Chips Act funding for Coherent InP fab expansion - Compound Semiconductor

US photonics company Coherent has secured up to $50 million in direct funding under the CHIPS and Science Act to expand its 6-inch InP semiconductor fabrication facility in Sherman, Texas. This invest... Read original →

Coherent’s $50M CHIPS Act award to scale 6-inch InP wafers isn’t just capacity expansion—it’s a strategic pivot to anchor photonic supply chains on U.S. soil. Technically, this surge in InP output will accelerate CPO and silicon photonics adoption in AI data centers, forcing rivals like Lumentum to fast-track 8-inch InP roadmaps. If the Sherman fab integrates EUV-ready cleanrooms, it could redefine compound semiconductor manufacturing standards. From a compliance angle, Washington’s 'supply chain security' narrative effectively erects cost barriers for firms reliant on Taiwan, China-based foundries. NVIDIA’s tight integration with Coherent signals a deliberate move to corner next-gen optical interconnect supply, countering Broadcom-Marvell alliances. Over the next 18 months, expect more photonics players to seek similar subsidies—but the industry’s unresolved leap from 6-inch to 8-inch InP may prove the real bottleneck to scaling.