Coherent & NVIDIA's US$650m Texas Facility Breaks Ground - Construction Digital

Coherent and NVIDIA have broken ground on a $650 million expansion of a semiconductor manufacturing campus in Sherman, Texas. The project aims to double the site’s production space, add a new building... Read original →

The $650M Coherent-NVIDIA expansion in Sherman isn’t just capacity scaling—it’s a strategic anchor for U.S. AI infrastructure sovereignty. Technologically, integrating indium phosphide photonics with EUV processes will accelerate sub-3nm optical interconnects, directly tackling AI data centers’ bandwidth bottlenecks. Policy-wise, the $50M CHIPS grant—though only 7% of total capex—imposes strict domestic sourcing and workforce localization mandates, inflating long-term compliance costs. TSMC (Taiwan, China) and Lumentum will likely counter: TSMC may fast-track Arizona-based photonic integration R&D, while Lumentum could pursue InP substrate acquisitions. Within 18 months, quadrupled wafer output will catalyze a U.S.-centric AI hardware ecosystem—but if EUV-enabled compound semiconductor yields lag, America’s foundational gaps in advanced packaging and materials will be starkly exposed.