Optical components maker Coherent (ticker COHR) is expanding its manufacturing footprint in Texas, and investors are taking notice.
According to Construction Review, the company has broken ground on a $650 million expansion of a Texas semiconductor facility geared toward AI, with the project backed by funding from the CHIPS Act — the U.S. program designed to bring more chip production onto American soil.
The move is centered on photonics, the technology that uses light rather than electricity to move data. As Yahoo Finance reported, Coherent's stock rose 7.5% following news of the CHIPS-backed Texas AI photonics expansion, with the report framing the question of whether the development changes the longer-term "bull case" for the company.
The expansion also ripples outward to one of the most closely watched names in artificial intelligence. According to Benzinga, the buildout gives Nvidia's supply chain a boost, as Coherent expands its Texas AI manufacturing facility. Photonics components are increasingly important for shuttling vast amounts of data between the chips that power AI systems, making suppliers like Coherent part of the broader infrastructure behind the AI boom.
Why it matters: As AI demand strains data centers, the companies that quietly supply the optical plumbing — and the government money helping them build at home — are becoming a key part of the story, and the market is rewarding it.