Coherent Corp. is expanding its photonics manufacturing capacity to meet surging demand from the AI and datacenter sectors. The company detailed the growth strategy in its annual 10-K report filed on August 14, 2026.
Coherent secured a preliminary $50 million memorandum under the CHIPS Act to expand its Sherman, Texas facility. The company is also increasing its research and development spending to $723 million.
The report identifies significant risks despite the current AI boom. Two major clients accounted for more than 10% of total revenue in fiscal 2026.
Management warned that AI-driven demand may be cyclical. Furthermore, the company faces supply chain vulnerabilities due to its reliance on limited and sole-source material providers.