Apple Awards $390M to Finisar to Increase Production

After the investment into a Corning glass plant earlier in 2017, Apple announced the second recipient for a portion of its advanced manufacturing fund. The recipient of $390 million is Finisar Corporation, a US-based developer and manufacturer of vertical-cavity surface-emitting lasers (VCSELs). These devices are used by Apple in the iPhone X as part of the face recognition component.

Some of the media called this out as an investment, Finisar highlighted that this is not an investment, but an upfront payment for devices to be manufactured at a later point in time. The money will be used to increase R&D into VCSELs as well as setting up a new 700,000-square-foot (65,000 m²) manufacturing plant in Sherman, Texas.

Analyst Comment

What looks like a follow through with their commitment to invest in USA-based manufacturing, has been interpreted by various analysts in a different ways. Some see this involvement as a way for Apple to increase its footprint in the AR world by pushing the output from Finisar higher, which allows them to incorporate the face and depth sensor into a wider range of upcoming iPhones. Others point out that this move may limit the availability of VCSELs in the open market, giving Apple a competitive advantage over Samsung.

No matter what the reason behind this move, $390 million is a significant chunk of money and whatever Apple wants to do with the VCSELs must be worth more than that to them.

At the same time Apple seems to be busy to increase its investment portfolio before the end to the year as we have reported earlier. (Shazam has AR Potential and Apple Buys VRVana) (NH)