Sherman just muscled its way deeper into the semiconductor big leagues, with Coherent Corp. set to receive a $14.08 million state grant to ramp up indium phosphide (InP) wafer production at its manufacturing campus on the city’s south side.
State officials said today that the Texas money is tied to a project representing more than $154 million in planned capital investment and will pull together portions of Coherent’s North American semiconductor operations in Sherman.
Grant details and local investment
The award, from the Texas Semiconductor Innovation Fund, totals $14,076,031 and is aimed at speeding scaled production of InP wafers at Coherent’s Sherman site, according to the Office of the Governor.
State officials say the Sherman project will anchor more than $154 million in capital spending and turn the facility into a consolidation hub for Coherent’s North American semiconductor work. The announcement rolled out on the governor’s official channels and quickly made its way across social media.
A first for six‑inch InP and what that means
Federal CHIPS materials describe the Sherman effort as backing what they call the world’s first 150‑mm (six‑inch) indium phosphide manufacturing line, and NIST notes a December 2024 preliminary memorandum of terms with the U.S. Department of Commerce that would provide up to $33 million in CHIPS funding to support the expansion.
Coherent has told investors that the new six‑inch InP line in Sherman began production last quarter and is now ramping. The company said the line should deliver higher yields and lower unit costs than its older three‑inch lines, according to its recent earnings call transcript on Investing.com.
Local scale and the Sherman campus
In SEC filings, Coherent describes its Sherman campus as a roughly 700,000‑square‑foot compound, making it one of the company’s largest manufacturing assets in the United States.
State permit documents show recent cleanroom renovation work at 6800 South US‑75 that is tied to an InP production upgrade, according to project filings with the Texas Department of Licensing and Regulation.
Company view and next steps
“This grant accelerates the establishment of the world’s first 6‑inch Indium Phosphide wafer factory in Texas,” Coherent Semiconductor Devices EVP Beck Mason said in a statement released through the Office of the Governor.
The company has also told investors that initial six‑inch yields are already outperforming its three‑inch lines, a technical edge Coherent says will speed capacity growth and help cut costs for the transceiver components that sit at the heart of datacom, telecom and AI interconnects, according to its earnings call on Investing.com.
Why it matters for Texas and U.S. supply chains
The TSIF program came out of the Texas CHIPS Act that Gov. Greg Abbott signed in 2023. The state’s CHIPS Office says lawmakers initially appropriated roughly $698 million for TSIF in 2023 and added another $250 million in 2025, bringing total appropriations to about $948 million.
State leaders frame the Coherent grant as one piece of a broader push to bulk up domestic photonics and semiconductor capacity that feeds data centers, AI workloads and advanced communications gear. For Sherman, it also cements the city’s role as a high‑stakes player in the race to control critical chipmaking technology.
