Coherent says it has started construction on an expanded manufacturing building in Sherman, Texas. The company broke ground on June 16, 2026, aiming to grow output at a site tied to a special kind of semiconductor production.

Coherent builds lasers, optical components, and compound semiconductors used to connect AI systems. In its description of the operation, it says it runs what it calls the world’s first 6-inch indium phosphide fab, which points to a focus on scaling up wafer manufacturing that supports high-speed data movement.

According to the announcement, the new building is designed to scale production of indium phosphide wafers used for carrying data between chips, servers, and data centers. That “between parts” part is easy to overlook in AI coverage, but it’s a big deal for how fast systems can move information and how reliably they can be put together at scale.

The company also tied the project to government support, announcing a $50 million CHIPS Act grant to help finance the expansion. Grants like this are often used to reduce the friction in building capacity, especially for specialized manufacturing that can take time to ramp.

For everyday people, this doesn’t show up as a new app or a faster download on its own. But if wafer production and the components built from it can expand, it can affect how quickly hardware supply catches up with demand—whether that demand is coming from large data centers or the teams trying to deploy AI in the real world.

Construction and scaling don’t happen overnight, and Coherent’s update doesn’t spell out timelines beyond the ground-breaking. Still, the move is a clear signal that companies are investing in the hardware “plumbing” that supports AI growth.

Source: NVIDIA Blog