Coherent, Skywater, and X-Fab to Receive CHIPS Act Funding

The U.S. Department of Commerce has signed three separate preliminary memoranda of terms under the CHIPS and Science Act to provide up to $33 million in proposed direct funding to Coherent, up to $16 million to Skywater Technology Foundry, and up to $50 million to X-Fab.

The proposed investment in Coherent would support the modernization and expansion of a state-of-the-art manufacturing cleanroom in Coherent’s existing 700,000 sq ft facility in Sherman, Texas, to establish the world’s first 150-mm indium phosphide (InP) manufacturing line by adding advanced wafer fabrication equipment to produce InP devices at scale.

InP optoelectronic devices are widely used in applications such as datacom and telecom transceivers, including for AI infrastructure applications, advanced sensing for consumer electronics, and medical and automotive applications. The increased production of Coherent’s InP devices, which are increasingly growing in demand, would allow the U.S. to advance supply chain resiliency and technological leadership and create approximately 70 jobs.

The proposed investment in SkyWater would support the modernization of its existing facility in Bloomington, Minnesota, to improve the quality of production and wafer services by replacing equipment, upgrading the facility’s cleanroom, space, and IT systems, and increase overall production capacity of 90-nm and 130-nm wafers by approximately 30%. The facility offers customers in the aerospace and defense, automotive, biomedical, and industrial markets the ability to prototype and scale to volume production differentiated technology.

SkyWater is a Department of Defense Trusted Foundry; as a result of proposed CHIPS funding, the company would be able to improve productivity and enhance operational sustainability to support Department of Defense missions as well as grow its commercial business. In addition, the State of Minnesota’s Forward Fund would provide $19 million in dedicated funding to support this proposed project.

The proposed investment in X-Fab would support the expansion and modernization of X-Fab’s silicon carbide (SiC) foundry facility, the only high-volume SiC foundry in the U.S. SiC technology is key to the global decarbonization efforts in the automotive and industrial sectors and offers multiple advantages over conventional silicon-based technologies for high-power applications.

The proposed CHIPS funding would bolster supply resiliency for critical infrastructure markets that were adversely impacted by foundry capacity shortages and supply chain disruptions during the COVID-19 pandemic.