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

A US$650m expansion of Coherent's semiconductor manufacturing campus in Sherman, Texas has broken ground, with plans to double the site's production space and create more than 1,000 jobs.

The project expands an existing 700,000 square-foot facility that was originally built as a silicon wafer fab by Texas Instruments, before being acquired by Finisar in 2017 and eventually passing to Coherent through the II-VI merger.

The expansion will add a new manufacturing building alongside advanced cleanroom capacity and wafer fabrication equipment.

NVIDIA founder and CEO Jensen Huang signed a steel beam at the groundbreaking that will form part of the newly constructed fab. He was joined by Coherent CEO Jim Anderson, Sherman Mayor Shawn Temann and Adriana Cruz, Executive Director of Texas Economic Development and Tourism.

"Today marks an important milestone, not just for Coherent, but for American manufacturing and for the future of AI infrastructure," Jim said at the event.

Funding and investment

The project is backed by US$50m in direct funding under the CHIPS and Science Act, confirmed via a letter of intent with the US Department of Commerce. This builds on approximately US$20m in earlier support from the Texas Semiconductor Innovation Fund, and the Sherman Economic Development Corporation.

NVIDIA invested a further US$2bn in Coherent in March 2026 to support research and development, future manufacturing capacity and US-based production, alongside a multibillion-dollar purchase commitment for advanced laser and optical networking products.

At completion, the expanded Sherman campus is expected to support more than 1,000 jobs in total, including more than 550 direct advanced manufacturing, engineering and technical roles. Coherent plans to quadruple wafer output at the site within 12 months of the expansion becoming operational.

"Coherent is a world-class company, and the work you do is vital to our future, vital to the future of artificial intelligence and vital to reindustrialising the United States," Jensen said at the groundbreaking.

The Sherman campus

The Sherman site sits in a city of roughly 45,000 people an hour north of Dallas, which has emerged as a focus for US semiconductor investment. Huang referred to the area as the "Silicon Prairie" at the groundbreaking event.

The facility operates what Coherent describes as the world's first and largest volume production six-inch indium phosphide fabrication platform, manufacturing the lasers, optical components and compound semiconductors used in AI data centre infrastructure.

The expansion will add cleanroom space and fabrication capacity on top of the existing 700,000 square-foot footprint, doubling manufacturing production space and increasing the site's ability to produce the optical components that connect chips, servers and data centres.

The Sherman campus already supplies components across NVIDIA's AI infrastructure stack, and the two companies have worked together for more than two decades.

"AI runs on compute, but it scales on connectivity, and Sherman is where that connective tissue gets built," Jim said.

NVIDIA partnership

NVIDIA's investment in the Sherman expansion reflects a broader US$500bn commitment to build AI infrastructure in the United States through industry partnerships, with new sites in Arizona and Texas.

The relationship with Coherent has deepened significantly as AI systems have grown in scale, creating demand for optical interconnects that copper cabling cannot meet across large data centre distances.

"AI factories are the infrastructure of the new industrial revolution. Connecting millions of GPUs into one thinking machine requires optical technology built for scale, speed and energy efficiency," Jensen said.

"Coherent's expanded InP manufacturing in Texas will help strengthen the US supply chain for the AI infrastructure the world is racing to build."