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primarysourced Photonics sector Coherent
COHR
~8 min read · 1,858 words ·updated 2026-04-29 · confidence 39%

Apple relationship — Advanced Manufacturing Fund and Face ID VCSEL second-source

The Apple relationship is one of Coherent’s most distinctive ecosystem positions and is structurally a legacy Finisar asset — inherited via the September 24, 2019 II-VI / Finisar acquisition. The relationship is anchored by two events: a $390 million Apple Advanced Manufacturing Fund award to Finisar on December 13, 2017 to refurbish the Sherman, Texas VCSEL fab, and the ongoing Face ID VCSEL second-source supply role that has continued since the iPhone X 3D-sensing program launched in late 2017. (Corning’s separate $200M AMF award announced May 12, 2017 is sometimes confused with the Finisar award; the Finisar award was the December 2017 follow-up — the AMF’s largest single commitment at that time.)

A frequent error in industry summaries: the Apple Face ID supplier framing is sometimes mischaracterized as “Broadcom and Lumentum” or “Broadcom and Finisar.” The correct framing is:

  • Lumentum was the original primary supplier of Face ID VCSELs starting with iPhone X (Sept 2017)
  • Finisar (now Coherent via the 2019 acquisition) was the second-source supplier that came online from the Sherman TX VCSEL fab funded partially by Apple’s $390M AMF award
  • Broadcom was not the primary — Broadcom (post-Avago) supplies edge-emitter laser components into Face ID for ToF/proximity sensing functions, but the dot-projector / flood-illuminator VCSELs are Lumentum-primary, Finisar/Coherent-second-source

The December 13, 2017 Apple Advanced Manufacturing Fund award

✓ verified-primary via Apple Newsroom press release dated December 13, 2017 (https://www.apple.com/newsroom/2017/12/apple-awards-finisar-390-million-from-its-advanced-manufacturing-fund/) and Finisar 8-K filings.

TermValueSource
Announcement dateDecember 13, 2017Apple Newsroom press release
Award size$390 millionApple press release
Award typeAdvanced Manufacturing Fund (a $1B fund Apple launched in 2017)Apple press release
RecipientFinisar CorporationApple press release
Use of proceedsRefurbish, expand, and operate the Sherman, Texas VCSEL fabApple press release
Fab attribute700,000 sq ft existing facility, formerly an MEMC silicon-wafer fabIndustry reporting
Headcount target500+ jobs at Sherman TXApple press release
First production targetSecond half of 2017Apple press release
Apple investment structureDirect financial commitment to Finisar (mix of capital and prepayments)Apple press release; not a direct equity investment

Apple’s stated rationale was to ensure US-domestic VCSEL manufacturing capacity for the 3D-sensing technology (Face ID dot projector, flood illuminator, and the Time-of-Flight LiDAR sensors that came in later iPhone Pro generations). The $390M figure represented the largest single Advanced Manufacturing Fund award at the time of announcement, and was followed by smaller AMF awards to other US-domestic suppliers (Corning glass, etc.).

The financial structure was not a direct equity investment — Apple did not buy Finisar stock. The $390M was a combination of capital commitment (direct payment for Apple-specified manufacturing assets at Sherman TX) and prepayment for future VCSEL deliveries. The exact split between capital commitment and prepayment was not publicly disclosed in primary-source detail. ⚠

The December 2017 award came roughly three months after Apple announced the iPhone X (September 12, 2017) — the AMF award funded ramp-up of an already-qualified Face ID second-source supplier rather than initial qualification. The award size (~$390M) represented the largest single Advanced Manufacturing Fund commitment at the time of announcement. ✓

The “Sherman TX” fab — what was actually being funded

Sherman, Texas is a city in north Texas (about 60 miles north of Dallas) that hosted a former MEMC Electronic Materials silicon-wafer fab. Finisar acquired the building in 2017 and undertook the refurbishment partially funded by Apple’s $390M commitment. The Sherman fab specifications:

AttributeValue
Total facility size~700,000 sq ft
Operational sinceLate 2017 (initial production)
Wafer types producedInP (for EML laser sources) + GaAs (for VCSELs)
InP wafer size6-inch / 150mm (an industry-leading wafer size for InP at the time of conversion)
VCSEL wafer size6-inch / 150mm (also industry-leading for VCSEL)
Workforce500+ at peak per Apple press release

The Sherman fab is the single most important manufacturing asset Coherent inherited from the Finisar acquisition — it is the source of both the InP EML laser-chip supply that anchors the AI-datacom franchise and the VCSEL supply that serves Apple Face ID, automotive LiDAR, and other 3D-sensing applications.

Face ID VCSEL second-source mechanics

Apple’s Face ID system uses several VCSEL-based subsystems:

SubsystemFunctionApproximate VCSEL specs
Dot projectorProjects ~30,000 IR dots onto user’s face for 3D mapHigh-density VCSEL array, 940nm
Flood illuminatorProvides uniform IR illumination for the faceModerate-density VCSEL array, 940nm
Proximity sensorDetects when iPhone is near user’s faceSingle VCSEL or small array
Time-of-Flight LiDAR (iPhone Pro starting 2020)3D depth sensing for AR/photographySpecialized VCSEL array

Apple has publicly maintained a dual-source supply discipline for VCSEL components since the iPhone X launch:

SupplierRoleSource
Lumentum (LITE)Primary VCSEL supplier — typically the larger volume share◐ industry-attributed; Apple does not publicly name suppliers, Lumentum 10-K disclosures imply Apple is the largest customer
Finisar (now Coherent)Second-source VCSEL supplier — meaningful volume share◐ industry-attributed; Apple does not publicly name suppliers
Broadcom (legacy Avago)Supplies adjacent edge-emitter components, NOT primary VCSEL◐ Limited public disclosure

The volume share between Lumentum and Finisar/Coherent has shifted over time — industry trade press reports a roughly 70/30 to 60/40 split favoring Lumentum on dot-projector / flood-illuminator VCSEL volume — but the exact split per iPhone generation is not publicly disclosed and varies. ⚠

Post-2019 acquisition status

When II-VI completed the Finisar acquisition on September 24, 2019, the Apple relationship transferred fully to the combined entity. The post-acquisition continuity was strong:

  • Sherman TX fab continues to operate under II-VI / Coherent management
  • VCSEL second-source supply to Apple continues uninterrupted
  • The remaining unfulfilled portion of the $390M AMF commitment carried over to II-VI / Coherent
  • Apple did not require any deal-specific consents or contractual modifications related to the change in control (per Finisar 10-K and merger proxy disclosures)

The post-2022 Coherent rebrand (September 8, 2022, after II-VI’s $7.01B acquisition of legacy Coherent Inc.) again did not affect the Apple relationship — the Sherman TX fab and VCSEL supply continued as before.

Ongoing status (2025-2026)

Apple has continued the dual-source VCSEL discipline through the iPhone 16 / 17 generations. Industry trade press through 2025 reports:

  • VCSEL volumes remain meaningful at both Lumentum and Coherent
  • The mix of dot-projector, flood-illuminator, and ToF-LiDAR VCSELs has shifted with each iPhone generation
  • Coherent’s post-2019 share of Apple VCSEL spending has been characterized as “stable to mildly growing” by industry analysts (◐)
  • Apple has not made additional public Advanced Manufacturing Fund awards to Coherent specifically (the original $390M to Finisar appears to be the full structural commitment)

⚠ Apple does not name suppliers in its filings and Coherent does not name Apple in its 10-K. The 10%+ customer disclosure in Coherent’s 10-K (typically 1-2 customers in the Networking segment) is widely believed (◐) to include Apple in some fiscal years, but this is industry attribution, not primary-source.

What the relationship is NOT

To clarify common misconceptions:

MisconceptionReality
”Apple is Coherent’s largest customer”⚠ Possibly in some years; not publicly disclosed and likely not consistently the largest. The hyperscaler datacom business is materially larger than Apple VCSEL revenue.
”Broadcom is the Face ID primary supplier”✗ False — Lumentum is the primary VCSEL supplier; Broadcom supplies adjacent components (proximity sensing, etc.)
”Apple owns equity in Coherent”✗ False — the AMF was a commercial commitment, not an equity stake. Apple has no direct equity ownership in Coherent.
”Apple acquired the Sherman TX fab”✗ False — Finisar / now Coherent owns and operates Sherman TX. Apple funded the refurbishment via AMF.
”The $390M was a one-time payment”⚠ Mostly true, but with some structure — mix of upfront capital and prepaid VCSEL deliveries; exact split not disclosed.

Strategic implications

  1. The Apple relationship is a quality signal — being one of two qualified Apple Face ID VCSEL suppliers requires sustained yield, quality, and capacity discipline. This is a structural moat.

  2. The Apple relationship is a moderate revenue contributor — VCSEL volumes for Face ID are non-trivial but materially smaller than the AI-datacom franchise.

  3. The Apple relationship is a hedge against AI-photonics cyclicality — Apple VCSEL demand is tied to consumer-electronics cycles (iPhone unit shipments), which are uncorrelated with AI-datacenter capex. This is a beneficial diversification.

  4. The Apple relationship reinforces US-domestic manufacturing positioning — Sherman TX is one of Coherent’s flagship US-domestic fabs, and the Apple AMF history is a recognizable proof point of US-supply-chain reliability.

  5. The Apple relationship is structurally durable — switching VCSEL second-source suppliers is technically and economically difficult; the iPhone X-era qualification cycle would have to be repeated. Apple has strong incentives to maintain Coherent as the second-source.

Caveats

  • Apple does not name suppliers in any public filing. All “Apple is Coherent’s customer” framing relies on industry trade press, supply-chain teardowns (iFixit, JEITA, etc.), and Coherent’s 10-K 10%+ customer counts (which are unnamed).
  • Volume share between Lumentum and Coherent is industry-estimated (◐) — exact splits per iPhone generation are not publicly disclosed.
  • The $390M AMF structure (capital commitment vs prepayment) was not disclosed in primary-source detail.
  • Post-2019 AMF additional awards to Coherent — none publicly disclosed; the original $390M to Finisar appears to be the full structural commitment.
  • The “Broadcom is NOT the Face ID primary” clarification is important — many secondary-source summaries incorrectly conflate Broadcom edge-emitter components with Face ID VCSEL supply.

Sources