PALMER TWP., Pa. — Another Lehigh Valley tech company is looking to expand after reaching a preliminary deal worth up to $79 million with the federal government to boost domestic production of semiconductor wafers.
The U.S. Department of Commerce announced a non-binding agreement with Coherent Corp. on Thursday morning that would create 320 new manufacturing jobs at its Newlins Mill Road facility. The planned expansion of the facility would create 40 construction jobs as well, department officials said in a news release.
The investment is intended to increase production capacity of silicon carbide substrates, specially engineered crystals. The crystal’s properties allow it to withstand high heat and voltage, making them ideal for electronic vehicles and aerospace applications, according to Coherent’s website.
Rob Beard, Coherent’s chief legal and global affairs officer, said in a prepared statement that the Butler County-based company was honored to partner with the federal government.
“This proposed investment reflects a shared commitment to strengthening domestic manufacturing, advancing cutting-edge technologies, and creating high-quality jobs in Pennsylvania,” Beard said. “By expanding our production capabilities for silicon carbide substrates and epitaxial wafers, Coherent is poised to drive innovation and meet the growing demand for materials that power energy and advanced applications.”
The Coherent deal is one of four non-binding agreements the department announced Thursday with a potential total of $246.4 million. The potential investments are funded by the CHIPS and Science Act, a bipartisan law Congress passed in 2022 in a bid to increase domestic production of critical technology — particularly semiconductors.
While microchips are an American invention, their production has largely shifted overseas.
When the COVID-19 pandemic led to a semiconductor shortage, U.S. officials recognized that overseas production was a serious threat to the American economy and national security. The resulting CHIPS and Science Act committed $280 billion to boosting America’s tech sector — including $52.7 billion for semiconductor manufacturing, research and development and workforce training.
“The proposed investments we’re announcing today would support projects that will bolster semiconductor and materials production across the country and advance America’s technological leadership on the world stage,” U.S. Secretary of Commerce Gina Raimondo said in the release.
Coherent is the second Lehigh Valley tech company to reach a non-binding agreement under the CHIPS and Science Act.
The Department of Commerce also announced a $93 million deal in October that would see Infinera create a state-of-the-art facility in South Bethlehem. The California-based company specializes in microchips capable of transferring massive amounts of data through light; it runs an Upper Macungie Township facility where its chips are packaged into specially designed containers to protect its devices from heat, vibrations and contaminants.
Coherent and Infinera were both part of a Lehigh Valley consortium of local governments, tech companies and colleges that applied for a $75 million grant under the CHIPS and Science Act to create a regional tech hub to boost semiconductor production in the region. The Biden administration announced that Lehigh Valley missed the cut for that program in October 2023.
It remains unclear whether any of these agreements will come to fruition.
President-elect Donald Trump will be sworn into office next week, and the returning president was critical of the CHIPS and Science Act on the campaign trail. Trump argued the country would be better served by installing tariffs on foreign-made chips rather than paying a premium to jumpstart domestic production.
