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10 Dec 2024
Photonics giant signs preliminary agreement to help scale device production with advanced wafer fabrication equipment.
Coherent is poised to benefit from the Biden Administration’s CHIPS Act legislation, with initial terms agreed for $33 million in support of indium phosphide (InP) device production at its giant wafer fab in Sherman, Texas.
The Pittsburgh-headquartered company, which makes a huge range of lasers and other optoelectronic products, says that it signed a “preliminary memorandum of terms” with the US Department of Commerce intended to help it invest in advanced wafer fabrication equipment to produce InP devices at greater scale.
InP optoelectronic devices such as 1550 nm laser emitters are already deployed widely in datacom and telecom transceivers, including the fast-growing area of artificial intelligence (AI) infrastructure, as well as sensor components in consumer electronics, and various medical and automotive applications.
“The increased production of Coherent’s InP devices, which are increasingly growing in demand, would allow the US to advance supply chain resiliency and technological leadership and create 70 direct jobs,” noted the firm.
CHIPS Act beneficiaries
Last month Coherent posted a 28 per cent year-on-year jump in quarterly sales revenues - with the increase attributed largely to the AI data center boom.
Giovanni Barbarossa, the company’s chief strategy officer, said in a company release: “This proposed investment allows Coherent to accelerate our industry leadership in InP technology and manufacturing.
“We are very excited to partner with the US Department of Commerce, Senator John Cornyn, the state of Texas, and the Sherman Economic Development Corporation as we expand our efforts to deliver world-class optoelectronic products as part of the AI infrastructure build out, as well as for advanced sensing applications.”
Passed by Congress in 2022, the CHIPS and Science Act was intended to allocate some $53 billion in federal funding with the aim of re-establishing semiconductor supply chains and chip-manufacturing expertise in the US.
Among the key beneficiaries have been silicon semiconductor device makers such as Intel, which has agreed nearly $8 billion in support of advanced chip manufacturing as the firm pivots towards a foundry business model that is set to produce devices for customers.
Similarly Taiwan’s TSMC, currently the world’s largest most prolific silicon chip foundry, has agreed $6.6 billion in CHIPS Act support for its subsidiary in Arizona. The firm has earmarked total investment of more than $65 billion to build three leading-edge fabs on greenfield sites in Phoenix.
Support for photonics technologies has been less high-profile, although another InP device maker, California’s Infinera, is set to receive up to $93 million via the same scheme.
Sherman scale
Originally built by Texas Instruments for silicon device production, the giant 700,000 square-foot fab in Sherman was acquired by InP device maker Finisar in 2017, with a plan to manufacture vertical cavity surface-emitting laser (VCSEL) arrays wanted by Apple for integration in facial recognition sensors featuring in the then-new iPhone X.
Critically, the aim was to establish a state-of-the-art manufacturing process on 150 mm-diameter InP wafers, a major step up from what was possible elsewhere at the time, in a bid to gain economy of scale.
In 2019 Finisar merged with II-VI, before II-VI completed its acquisition of the original Coherent laser business in 2022, and adopted the name for the much-expanded company that now has an annual turnover in the region of $5 billion.
Commenting on the CHIPS Act development, Texas senator Cornyn said: “The chipmaking capabilities these resources will enable at Coherent in Sherman will help the US reclaim its leadership role in the critically important semiconductor industry, and I look forward to seeing more Texas-led advancements in the years to come.”
In addition to the pledged support for Coherent, the Department of Commerce announced on the same day proposed investments of $50 million in the silicon carbide (SiC) specialist foundry X-Fab, also based in Texas, and $16 million for Minnesota’s SkyWater Technology.
While best known for its silicon expertise, Skywater also offers MEMS and photonic integrated circuit (PIC) manufacturing services, including integration of detectors, fiber couplers, grating couplers, modulators, and waveguides.
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