Coherent Secures $15 Million in CHIPS Act Funding Through the CLAWS Hub to Accelerate Commercialization of Wide- and Ultrawide-Bandgap Semiconductors

Rhea-AI Summary

Coherent Corp. (COHR) secures $15 million funding from the CHIPS Act to accelerate the commercialization of wide- and ultrawide-bandgap semiconductors, silicon carbide, and single-crystal diamond. This funding aims to strengthen the U.S. semiconductor supply chain and establish a leadership position in next-generation technologies.

Insights

Market Research Analyst

The $15 million funding received by Coherent Corp. from the CHIPS Act represents a strategic investment in securing the semiconductor supply chain, a matter of national importance given recent global supply chain disruptions. The investment in wide- and ultrawide-bandgap semiconductors taps into a rapidly growing market, essential for advanced technologies such as electric vehicles and smart power grids. This funding is likely to bolster Coherent's position in the semiconductor industry, potentially leading to increased market share and enhanced competitive advantage.

From an investor's perspective, this funding could translate into an accelerated R&D pipeline, leading to faster commercialization of advanced semiconductor technologies. This could result in a positive outlook on Coherent's future revenues and profitability, assuming successful development and integration of these technologies into the market. However, the long-term return on investment hinges on the company's ability to scale production and navigate the complex regulatory and technological landscape.

Financial Analyst

The infusion of capital from the CHIPS Act into Coherent Corp. is a significant financial event that may have a ripple effect on the company's stock performance. The immediate financial implication is the non-dilutive nature of this funding, which means existing shareholders are not facing dilution of their equity. Furthermore, the backing by the DoD adds a layer of credibility and stability to the company's future operations.

Investors should monitor the deployment of these funds closely, as efficient use could lead to improved profit margins due to advancements in semiconductor efficiency and performance. The focus on energy-efficient technologies in AI data centers could also open up new revenue streams for Coherent. However, potential risks include the execution risk associated with the development of cutting-edge technologies and the need to keep pace with rapid technological advancements.

Semiconductor Industry Expert

The significance of wide- and ultrawide-bandgap semiconductors cannot be overstated in the context of next-generation technology applications. Silicon carbide and single-crystal diamond semiconductors are at the forefront of enabling high-efficiency, high-power electronics. For instance, silicon carbide is instrumental in reducing energy losses in power conversion systems, which is critical for both electric vehicles and smart grids. The mention of single-crystal diamond in quantum applications indicates a leap towards technology that could revolutionize computing, sensing and encryption.

It is important to note that the semiconductor industry is characterized by high barriers to entry and significant capital expenditure. Coherent's partnership with the CLAWS Hub could provide access to shared resources and expertise, potentially reducing the time to market for these advanced materials. The long-term impact of this development hinges on the company's ability to successfully navigate the complex manufacturing processes and stringent quality requirements that are characteristic of the semiconductor industry.

PITTSBURGH, April 10, 2024 (GLOBE NEWSWIRE) -- Coherent Corp. (NYSE: COHR), a leader in wide- and ultrawide-bandgap semiconductors, today announced that it secured $15 million in funding from the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022 that provided the Department of Defense (DoD) with $2 billion to strengthen and revitalize the U.S. semiconductor supply chain.

One of the key objectives of the CHIPS program is to nurture ecosystems that reduce risk, incentivizing large-scale private investment in production, breakthrough technologies, and workers. To that end, the DoD, through the Naval Surface Warfare Center Crane Division and the National Security Technology Accelerator, established eight Microelectronics Commons regional innovation hubs in September, including the Commercial Leap Ahead for Wide-Bandgap Semiconductors (CLAWS) Hub based in North Carolina and led by NC State University. As a member of the CLAWS Hub, Coherent will receive $15 million to accelerate the commercialization of next-generation wide- and ultrawide-bandgap semiconductors, namely, silicon carbide and single-crystal diamond, respectively.

“We are excited to be recipients of funding from the CHIPS Act, delighted to be part of the CLAWS Hub, and proud to help the U.S. establish a strategic, long-term leadership position in these critical next-generation semiconductor technologies,” said Sohail Khan, Executive Vice President, Wide-Bandgap Electronics. “Wide- and ultrawide-bandgap semiconductors enable the electrification of transportation, including road vehicles, high-speed trains, and mobile industrial machinery. They also enable smart power grids to efficiently respond to fluctuations in energy demands by regulating the delivery of electricity from conventional and renewable sources to distribution networks, as well as to and from utility-scale power storage and microgrids.”

In addition to DoD requirements for high-voltage, high-power applications and systems including hybrid electric vehicles (HEVs), more electric aircraft (MEA) components, directed energy, Navy vessel power systems, and all-electric ships, silicon carbide power electronics are increasingly recognized for their potential to greatly improve the energy efficiency of artificial intelligence (AI) data centers and traditional hyperscale data centers, where power consumption is growing rapidly due to the exploding demand for data- and compute-intensive workloads from AI, cryptocurrency mining, and blockchain applications.

Single-crystal diamond promises to exceed the performance of silicon carbide and greatly expand the applications universe with quantum computing, quantum encryption, and quantum sensing.

About Coherent

Coherent empowers market innovators to define the future through breakthrough technologies, from materials to systems. We deliver innovations that resonate with our customers in diversified applications for the industrial, communications, electronics, and instrumentation markets. Headquartered in Saxonburg, Pennsylvania, Coherent has research and development, manufacturing, sales, service, and distribution facilities worldwide. For more information, please visit us at coherent.com.

Contact

Amy Wilson
Manager, Corporate Communications
corporate.communications@coherent.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/cfd209a9-3992-4d20-aba5-9a3f27af7a65

FAQ

What funding did Coherent Corp. secure from the CHIPS Act?

Coherent Corp. secured $15 million funding from the CHIPS Act.

What are the key objectives of the CHIPS program?

The key objectives of the CHIPS program include nurturing ecosystems to reduce risk, incentivizing large-scale private investment in production, breakthrough technologies, and workers.

What are the next-generation wide- and ultrawide-bandgap semiconductors that Coherent Corp. will accelerate the commercialization of?

Coherent Corp. will accelerate the commercialization of silicon carbide and single-crystal diamond.

What are the potential applications of wide- and ultrawide-bandgap semiconductors?

Wide- and ultrawide-bandgap semiconductors enable the electrification of transportation, smart power grids, high-voltage, high-power applications, hybrid electric vehicles, more electric aircraft components, directed energy, Navy vessel power systems, and all-electric ships.

How do silicon carbide power electronics contribute to improving energy efficiency in data centers?

Silicon carbide power electronics are recognized for improving the energy efficiency of AI data centers and traditional hyperscale data centers by regulating electricity delivery and responding to energy demand fluctuations.