Published: Wed, December 13, 2017
Hi-Tech | By Grace Becker

Apple is investing in Finisar, which makes iPhone X facial identification tech

Apple is investing in Finisar, which makes iPhone X facial identification tech

Apple said the deal with Finisar, a maker of optical communications components, is part of its commitment to support US manufacturing jobs and innovation.

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.

With Apple's money, Finisar is going to reopen a 700,000 sq. feet (65,000 sq. meters) manufacturing facility in Sherman, Texas, where some 500 jobs will be created between engineers, technicians, and a maintenance team. The first investment was a $200 million infusion into Gorilla Glass maker Corning Inc in May.

President Trump has called on Apple to move more of its production to the U.S. He called on the tech giant to start building its "damn computers" in the States in 2016, and said earlier this year Apple has plans for three "big" plants in the U.S. Apple's American-focused fund might be one way for CEO Tim Cook to alleviate Trump's calls to action.

These chips are integral in depth and proximity sensing.

Google is building its next AI research center in China
And Chinese artificial intelligence experts may have trouble finding all the information Google offers about the technology. Although it did make its Google Translate app available in China earlier this year in a rare product move on Chinese soil.

It's also important for Apple because the company plans a ten times increase in its VCSEL orders in the fourth quarter than were manufactured around the world in the past year.

Finisar stock jumped on the news. Apple was up 0.7%, near 173.

The investment will also create more than 500 high-skill jobs at Sherman.

Piper Jaffray analyst Troy Jensen raised his price target on Finisar to 28 from 22 and reiterated his overweight rating. "Given Lumentum's initial success, we assumed Lumentum would maintain its primary supplier status at Apple for several years to come, but given Apple's cash commitment to Finisar, we believe Finisar could capture significantly more share than previously expected".

Apple's need for so many VCSEL wafers is a good sign the company either expects demand for AirPods and iPhone X to increase, has new products coming that'll take advantage of the technology, or maybe both.

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