Finisar Corp.’s stated intention to make Sherman the “VCSEL Capital of the World” will soon have one less competitor in North Texas, as the company’s chief executive officer said its operations in Allen will eventually be incorporated into the local facility.
During a ribbon cutting event for the local facility Monday, Hurlston said Finisar is “open for business in Sherman” and expects to be shipping its vertical-cavity surface-emitting lasers to customers by the end of the year. In an interview with the Herald Democrat after the event, Hurlston said he’s informed Finisar staff in Allen that eventually their 160,000-square-foot facility will be shuttered and moved to the nearly 700,000-square-foot building in the former MEMC building on Sherman’s south side.
“I’ve told the folks in Allen that eventually we’re going to move the Allen line up to Sherman,” Hurlston said. “I think the timeline is not entirely clear as to when we’re going to do that, but this (Sherman facility) has plenty of room to house the Allen stuff. What we’ll do is all the equipment from Allen that’s dedicated to our old optical networking business, we’ll keep dedicated to that and then all the equipment that’s here (in Sherman) that’s new — that’s called the six-inch production line — will be on these new consumer applications.”
Finisar announced in December that it would hire 500 new employees to expand its production of VCSELs at its new Sherman facility this year to help meet Apple’s demand for the technology in its iPhone line of products. VCSELs are small semiconductor devices that emit light vertically and measure the depth at which that light is reflected. That depth-sensing technology helps power Apple product features such as facial recognition, portrait mode selfies and proximity-sensing capabilities.
In addition to the numerous smartphone applications, Finisar Executive Vice President and General Manager of 3-D Sensing Julie Eng said VCSELs could soon be put to use in new markets such as medical and manufacturing, to make vehicles safer for drivers and other motorists and even in vacuum cleaners and lawnmowers.
“We’re trying to go into these more consumer applications and without (the) Sherman (facility), we simply can’t do that,” Hurlston said. “What happens is our old business, which is the laser business and optical networking, typically you think of an order of hundreds of thousands of units in a month. The volumes are big, they’re substantial, but when you talk about these consumer applications, you’re talking millions of units even a week, so the numbers are wildly different. And in order to deliver that kind of scale, we need a factory like this — a bigger factory that can deliver that kind of capacity.”
Sherman Economic Development Corp. board Chairman John Sild said his understanding is the local Finisar plant will eventually employ more than 1,000 people. SEDCO Vice President of Business Retention & Expansion Stacey Jones said the addition of the approximately 200 workers from the Allen facility will bring the local employee total to around 700.
“That’s more heads in a bed in our community,” Sild said. “It’s also more people in our restaurants and shopping local. So I’d say the trickle down effect would be a great impact.”
Jones pointed out even if all of those employees don’t move to the area, they’re still likely to help the local economy.
“Some of those people drive south to work and they’ll start driving north, so that means they’ll be more likely to finish up their grocery shopping (in Sherman) and all that sort of thing,” Jones said.
At Monday’s ribbon cutting event, Finisar Sherman General Manager and Vice President Jeff Brown said the company currently has around 200 local employees. In the news release announcing the local Finisar ribbon cutting, Hurlston said the state-of-the-art facility in Sherman would expand the company’s VCSEL production capacity.
“We are also pleased to create hundreds of manufacturing jobs in the U.S. and to hire talent from the local area as we work together to make Sherman the VCSEL Capital of the World,” Hurlston said in the news release.
Change of plans
Hurlston’s plan to eventually close the company’s Allen facility differs a bit from what Finisar officials previously said about the possibility. When the Sherman expansion was announced in December, former CEO Jerry S. Rawls, who retired at the end of December, said Finisar’s project volumes were so enormous, the company may need the Allen facility’s capacity to help produce VCSELs.
“It’s clear it’s possible that somewhere down the road we would consolidate Allen into Sherman, but we’re not committed to doing that,” Rawls said at the time. “Let’s take it one step at a time, and let’s get the Sherman plant up and running and efficient. And if the demand comes from Apple the way they say it is, we may just have to keep expanding Apple VCSEL arrays in Sherman while we produce all our data communication and telecommunication VCSELs in Allen.”
In January, Finisar Vice President of New Markets Craig Thompson said the Allen facility, which was originally used to service the company’s own internal needs for VCSELs, would continue to operate as a separate site to service the company’s core internal business for the foreseeable future.
“Demand for these types of products and these new applications are sufficiently large that I’m going to need all the capacity here plus what we can build out in Sherman,” Thompson said. “We’ve had to upgrade this facility a fair bit to meet the standards of the industry and the new applications that are coming. Sherman will be world class from day one. It will be the most advanced laser manufacturing facility in the world. And we hope it remains that way for a long time.”
On Monday, Hurlston said Finisar has been shipping VCSELs to Apple from its Allen facility for a while and estimated the Sherman facility will be able to do the same by the end of the year.
“I would say the first engineering samples will be (ready) in the next couple of weeks — we expect to start running our first production runs next week,” Hurlston said. “So I would say September, October time, we expect to be qualified (have everything tested internally). And then what has to happen is customers have to qualify — they have to do their own testing of the goods and testing the equipment and things like that.”
Hurlston said it was hard to determine how long that testing would take, as it is out of Finisar’s hands.
“We would say probably by the end of the year we would expect to be actually shipping, in volume, out of this factory,” Hurlston said.