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08 May 2025
Shipments for AI data center and telecoms applications continue to grow quickly despite macroeconomic tension.
Diversified laser and photonic component manufacturer Coherent has posted record-breaking sales of just under $1.5 billion for its latest financial quarter, up 24 per cent year-on-year as demand related to artificial intelligence (AI) data centers shows no sign of slowing down.
That is despite what CEO Jim Anderson described as a high level of macroeconomic uncertainty resulting from new US import tariffs.
And although that uncertainty could impact demand for the US firm’s industrial lasers, Anderson said that Coherent’s sprawling global manufacturing footprint gave it a resilience and adaptability that would minimize any direct tariff effects.
“Our geographically diverse supply chain, combined with the internal production of many of our most critical technologies, provides adaptability and optionality that benefits our customers,” he told an investor conference call discussing the latest results.
With 60 production facilities spread across 14 different countries - and around half of those facilities located in the US - Anderson said that Coherent could adapt as necessary to the evolving tariff landscape.
1.6T transceiver ramp
The CEO highlighted the large number of new products unveiled by Coherent over the past couple of months, most of which related to AI and telecom developments at the recent Optical FIber Communications (OFC) event in San Francisco.
Among several new launches were Coherent’s options for new 1.6 Tb/s optical transceivers, with the company developing three different technological approaches based around externally modulated lasers (EMLs), vertical cavity surface-emitting lasers (VCSELs), and silicon photonics.
Those transceivers are expected to go into commercial production later this year, with an extended ramp into 2026.
The next step on the optical transceiver roadmap will be 3.2 Tb/s speeds, and with this in mind Anderson also picked out the firm’s work on 400 Gb/s EMLs, seen as the “foundation stone” for that technology.
Demand for current technologies saw Coherent’s networking division post sales of $897 million in the three months ending March 31, up 45 per cent year-on-year.
For the company’s industrial division, where demand for excimer lasers used for annealing applications in organic LED (OLED) display production is said to be strong, sales of $364 million rose at a steadier rate of 4 per cent.
Illinois fab sale
Coherent’s materials division, which largely relates to silicon carbide electronics, posted a slight decline in sales revenues, to $237 million.
Anderson highlighted recent efforts to streamline that part of the company’s portfolio, by focusing on substrate and epitaxy rather than devices and modules, while the firm is also looking to sell the former EpiWorks wafer foundry in Champagn, Illinois, that was acquired nearly a decade ago as part of a wider effort to expand VCSEL production.
The sales increase and streamlining efforts saw Coherent swing to a pre-tax profit of $9.9 million in the latest quarter, compared with a pre-tax loss of $31.9 million in the same quarter last year.
Looking ahead, and with the tariff-related uncertainty in mind, Coherent’s executive team said that they were expecting sales in the June quarter to be flat sequentially, coming in somewhere between $1.425 billion and $1.575 billion.
• Investors appeared to react positively to that outlook and the wider commentary, with Coherent’s stock price rising in value by around 5 per cent on the Nasdaq in pre-market trading following the update.
At just over $73, the firm’s stock price is still down more than 25 per cent since the start of 2025, and currently corresponds to a market capitalization in the region of $11 billion.
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