Apple invests $390M in iPhone laser chip maker

Image Source Apple

Image Source Apple

Apple is investing $390 million in Finisar, which builds the components found in the TrueDepth camera on the iPhone X, the Cupertino company announced on Wednesday. Besides Finisar, Apple announced in May its $200 million investment in Corning Incorporated to support their R&D, capital equipment needs and glass processing.

Finisar will use the money to refurbish a manufacturing plant in Texas where it will build chips created to power special iPhone features including Face ID, animojis and portrait photography. Finisar will also expand production of proximity sensors that are used in Apple AirPods. Finisar is planning to open a manufacturing plant in Texas to create the VCSELs that Apple requires for its products. The Sherman facility will be hiring a bevy of engineers, technicians, and maintenance teams to run the plant.

The company says its VCSEL business now generates revenue in the "low single-digit millions", but clearly there could be much more demand in the quarters ahead: In the fourth quarter of this year, Apple alone will purchase 10 times more VCSEL wafers than previously manufactured globally over a similar time period.

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VCSEL technology is a better performing, more compact and cost-efficient solution compared to traditional edge-emitting lasers for many emerging applications. "We're extremely proud that our involvement will help transform another American community into a manufacturing powerhouse", the exec said.

Finisar CEO Jerry Rawls said: "When you combine our proven ability to consistently manufacture exceptional products with our new state-of-the-art Sherman facility, we're confident we can achieve our shared goal of providing consumers with incredibility exciting features".

The investment will enable Apple to "get better supply and better pricing, and it makes it more hard for Android phones to compete", said Gene Munster, a longtime Apple watcher at Loup Ventures.

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