--- title: "Jensen Huang Breaks Ground in Texas; Coherent Optical Chip Factory Construction Begins" type: "News" locale: "en" url: "https://longbridge.com/en/news/290015788.md" description: "As 576 GPUs collaborate across eight racks, copper cables have reached their physical limits—optical interconnects are becoming an unavoidable hardware imperative for AI expansion. On June 16, Jensen Huang personally attended the groundbreaking ceremony for Coherent's facility expansion in Texas, marking the first tangible milestone of NVIDIA's $2 billion investment. The world's first 6-inch indium phosphide mass production line is set to accelerate, and the outcome of the computing power race may well be decided within this \"corridor of light.\"" datetime: "2026-06-17T07:39:39.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/290015788.md) - [en](https://longbridge.com/en/news/290015788.md) - [zh-HK](https://longbridge.com/zh-HK/news/290015788.md) --- # Jensen Huang Breaks Ground in Texas; Coherent Optical Chip Factory Construction Begins NVIDIA and Coherent's optical interconnect strategy is moving from paper to foundation. On June 16, NVIDIA Founder and CEO Jensen Huang and Coherent CEO Jim Anderson jointly attended the groundbreaking ceremony for Coherent's facility expansion in Sherman, Texas. **The expansion will increase the capacity of the world's first 6-inch indium phosphide (InP) wafer mass production line, providing key optical interconnect components for NVIDIA's AI infrastructure.** Coherent simultaneously announced it had received a $50 million subsidy under the CHIPS Act to support the construction of this facility. This groundbreaking marks the first substantive implementation following NVIDIA's announcement in March of a $2 billion investment in Coherent, along with multi-billion dollar procurement commitments, signaling a further deepening of their nearly two-decade-long partnership. This development reinforces the core position of the optical interconnect sector in AI infrastructure construction and provides a clearer timeline for Coherent's capacity expansion. ## Optical Interconnects: The Physical Bottleneck of AI Expansion **As AI systems continue to scale, the physical limits of copper cable transmission are becoming a realistic constraint for data centers.** At the groundbreaking ceremony, Jensen Huang explained that when 576 GPUs operate as a single system across eight racks—as designed for NVIDIA's upcoming Vera Rubin Ultra NVL576—copper cables can no longer handle signal transmission across racks. As signal rates increase, the effective transmission distance of metal traces continues to shorten. If copper cables were forcibly used to connect eight racks, data centers would have to consume significant amounts of power on signal conditioning and retimers, power that could otherwise be used for computation. Although optical solutions incur a one-time loss during electrical-to-optical conversion, once converted, distance imposes almost no additional cost. At the NVL576 scale, optical interconnects are the most energy-efficient choice. Jim Anderson summarized this logic in one sentence: "AI runs on compute but scales on connectivity—and Sherman is where this connectivity fabric is manufactured." ## 6-Inch InP Wafers: The Technical Pivot for Capacity Leap Coherent operates what it claims is the world's first 6-inch indium phosphide mass production line in Sherman. This specification holds significant meaning in the compound semiconductor field. **Currently, most InP production lines globally remain at the 3-inch or 4-inch wafer stage. Since wafer area is proportional to the square of the diameter, upgrading from 3 inches to 6 inches expands the usable area by approximately four times, directly increasing the number of devices produced per batch and significantly diluting unit costs. This improvement in yield and cost structure is precisely the supply foundation required for large-scale AI construction.** At the ceremony, Jensen Huang stated that it took 50 years to build the first production line, but in the past year alone, capacity has quadrupled, which in itself is a measure of the accelerating demand for computing. The expanded facility will produce InP wafers, which will ultimately be packaged into pluggable optical modules—roughly the size of a USB flash drive—that plug directly into the front panels of NVIDIA network switches, transmitting data between data center racks where copper cables cannot reach. These modules also provide external laser modules for NVIDIA's Spectrum-X Photonics and Quantum-X Photonics co-packaged optical switches. ## Dual Drive of Policy Funding and Private Capital This expansion has received financial support from both public and private sectors. On the public funding front, Coherent announced it received a $50 million subsidy under the CHIPS Act, adding to approximately $17 million in early support previously received from the Texas CHIPS program and the Sherman Economic Development Corporation. The CHIPS Act, with a total scale of approximately $50 billion, aims to promote the reshoring of chip manufacturing to the United States. On the private capital front, NVIDIA announced in March a $2 billion investment in Coherent to support R&D, future capacity expansion, and domestic U.S. manufacturing, accompanied by multi-billion dollar procurement commitments for advanced laser and optical networking products. NVIDIA had previously announced plans to build new facilities in Arizona and Texas through industry partnerships, aiming to produce up to $500 billion worth of AI infrastructure in the United States. At the ceremony, Jensen Huang stated, "Coherent is a world-class company, and the work you are doing is critical to our future, to the future of artificial intelligence, and to the re-industrialization of America." ### Related Stocks - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [COHR.US](https://longbridge.com/en/quote/COHR.US.md) - [NVD.US](https://longbridge.com/en/quote/NVD.US.md) - [NVDD.US](https://longbridge.com/en/quote/NVDD.US.md) - [NVDS.US](https://longbridge.com/en/quote/NVDS.US.md) - [07788.HK](https://longbridge.com/en/quote/07788.HK.md) - [NVDL.US](https://longbridge.com/en/quote/NVDL.US.md) - [NVDX.US](https://longbridge.com/en/quote/NVDX.US.md) - [07388.HK](https://longbridge.com/en/quote/07388.HK.md) - [NVDQ.US](https://longbridge.com/en/quote/NVDQ.US.md) - [NVDU.US](https://longbridge.com/en/quote/NVDU.US.md) - [NVDY.US](https://longbridge.com/en/quote/NVDY.US.md) - [NVDB.US](https://longbridge.com/en/quote/NVDB.US.md) - [NVDG.US](https://longbridge.com/en/quote/NVDG.US.md) - [NVDO.US](https://longbridge.com/en/quote/NVDO.US.md) - [NVDW.US](https://longbridge.com/en/quote/NVDW.US.md) - [NVYY.US](https://longbridge.com/en/quote/NVYY.US.md) - [NYYY.US](https://longbridge.com/en/quote/NYYY.US.md) - [DIPS.US](https://longbridge.com/en/quote/DIPS.US.md) - [09388.HK](https://longbridge.com/en/quote/09388.HK.md) - [MAGX.US](https://longbridge.com/en/quote/MAGX.US.md) - [COHX.US](https://longbridge.com/en/quote/COHX.US.md) - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [SOXQ.US](https://longbridge.com/en/quote/SOXQ.US.md) - [XSD.US](https://longbridge.com/en/quote/XSD.US.md) - [PSI.US](https://longbridge.com/en/quote/PSI.US.md) - [FTXL.US](https://longbridge.com/en/quote/FTXL.US.md) - [NVD.DE](https://longbridge.com/en/quote/NVD.DE.md) ## Related News & Research - [Nvidia Supply Chain Gets A Boost As Coherent Expands Texas AI Manufacturing Facility](https://longbridge.com/en/news/290038332.md) - [Coherent Breaks Ground on Expanded Texas Facility, Scaling AI’s Optical Backbone](https://longbridge.com/en/news/289970533.md) - [Coherent to receive $50m US CHIPS Act funding to expand Sherman 6-inch InP fab](https://longbridge.com/en/news/290043288.md) - [SharonAI Raises $1.6 Billion to Expand NVIDIA AI Infrastructure](https://longbridge.com/en/news/290066574.md) - [Nvidia or AMD: Top Investor Says Only One AI Stock Is Worth Buying](https://longbridge.com/en/news/289369149.md)