Finisar gets $390 million from Apple to make more iPhone X chips
Finisar Corp is getting a $390 million investment from Apple Inc to revive a plant in Texas, which will boost production of chips that power high-profile iPhone X features including Face ID and portrait mode photos.
Shares of Finisar, a Sunnyvale, California-based optical components maker, rose more than 30 percent to $25.41 on Wednesday morning.
Finisar will use the money to reopen a 700,000-square-foot plant in Sherman, Texas to ramp up production of laser chips called vertical-cavity surface-emitting lasers, or VCSELs.
The lasers will also be used for 3D sensors in AirPods, Apple`s wireless headphones.
Finisar is expected to ship products from the plant starting in the second half of 2018.
"Taking in this amount of money, obviously there`s a significant investment that`s going to be made not just for 2018 but beyond," Needham & Co analyst Alex Henderson said.
Shares of Finisar rival Lumentum Holdings Inc fell 12 percent to $45.80, which Henderson said validates how important 3D sensing technology is to Apple and other vendors.
Lumentum is the top supplier of VCSELs and represents a "single source risk" for Apple, he added. "Apple is accelerating the investment at the second source supplier to diminish its risk."
The investment is Apple`s second from its $1 billion advanced manufacturing fund that seeks to foster innovation and create jobs. The first investment was a $200 million infusion into Gorilla Glass maker Corning Inc in May.
In the fourth quarter of 2017, Apple will buy 10 times more VCSELs than were previously made worldwide over a similar time period, it said.
The investment will also create more than 500 high-skill jobs at Sherman.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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