Apple grants $390 million to Finisar to boost laser chip production

Doris Richards
December 14, 2017

The iPhone maker has committed to spend at least $1 billion through its Advanced Manufacturing Fund in US-based companies to support high-tech manufacturing.

Following criticism of facial recognition (FaceID) within the iPhone X, recent reports reveal Apple has invested $380 million in the firm which manufactures the chip processing both FaceID and Portrait Mode. That mirrors Apple's previous $200 million investment in the research and development of Corning, another key Apple supplier.

The award will enable Finisar to exponentially increase its R&D spending and high-volume production of vertical-cavity surface-emitting lasers (VCSELs).

This special kind of component features in numerous Apple's products and enables features such as Face ID, ARKit, and even Animoji but also proximity sensing that, for instance, allows AirPods to stop playing audio when one of the two buds is removed from the user's ear.

Finisar is expected to ship products from the plant starting in the second half of 2018.

"VCSELs power some of the most sophisticated technology we've ever developed", Apple's chief operating officer, Jeff Williams, said in a statement.

Apple said it would buy 10 times more VCSELs than were previously made worldwide in the fourth quarter, compared with a year earlier. Approximately 500 new jobs will be created as a result of Apple's grant. "Technology is only as good as the people behind it, and Finisar is a company with a long history of putting its employees first and supporting the community it's a part of".

Shares of Finisar were up almost 17 percent at $22.50 in premarket trading, while Apple shares were flat.

During a quarterly investor conference call last week, Finisar's CEO Jerry Rawls refused to be drawn on whether the company's increasing VCSEL output was destined for Apple, or if the phone maker had qualified its components, citing "non-disclosure obligations" that Apple is well-known for using. Consistent with Apple's commitment to the environment, the company intends to procure enough renewable energy to cover all of its Apple manufacturing in the US.

The investment announced Wednesday is a huge lifeline for Finisar.

Other reports by Iphone Fresh

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