Coherent Corp.’s stock COHR jumped 3.2% premarket Tuesday, following the announcement of a significant investment in its silicon carbide business. Denso Corp. 6902 and Mitsubishi Electric Corp. 6503 will contribute $500 million each, securing a 12.5% non-controlling stake in the Pittsburgh-based company.
Boosting Manufacturing Expansion and Market Position
Coherent Corp. will retain a majority stake of 75% and establish a subsidiary to oversee the silicon carbide business. Sohail Khan, Coherent’s EVP for new ventures and wide-bandgap electronics technologies, will continue to lead the operations. The $1 billion investment will primarily fund the expansion of manufacturing capabilities for substrates and epitaxial wafers.
In addition to the financial boost, Coherent has secured concurrent supply agreements that will further strengthen its position in the market. The company believes that these developments will enhance its competitive edge and enable continued growth.
Coherent Corp.’s stock has experienced a decline of 12% this year. However, the broader market, as represented by the S&P 500 SPX, has seen a notable gain of 13%.