As artificial intelligence (AI) and high-performance computing (HPC) enjoy burgeoning growth, chip power consumption is highly on the rise—making heat dissipation a critical bottleneck limiting performance and reliability. On June 13, U.S.-based Coherent announced the launch of its breakthrough diamond-silicon carbide (diamond-SiC) composite material, aiming to revolutionize thermal management solutions for AI and HPC applications.

The patented diamond-SiC material from Coherent boasts an isotropic thermal conductivity exceeding 800 W/m-K, which is twice the performance of copper, the current industry benchmark. Additionally, it closely matches the coefficient of thermal expansion (CTE) of silicon, making it highly compatible for direct integration with semiconductor devices—offering an ideal solution for heat dissipation in next-gen computing systems.

Steve Rummel, Senior Vice President of Coherent’s Engineered Materials group, stated, “Diamond remains unmatched in managing extreme thermal loads in electronics. Our patented diamond-SiC material significantly outperforms traditional materials, enabling more reliable operation, longer component lifespans, and dramatically reduced cooling costs.” With cooling accounting for up to 50% of energy consumption in data centers, thermal efficiency is now more critical than ever. This material breakthrough is expected to have a profound impact across multiple industries including semiconductors, data centers, automotive, and aerospace.

Coherent is undergoing a radical business transformation under CEO Jim Anderson, who announced at the company’s Investor Day that the firm will divest five unprofitable product lines, focus its silicon carbide operations on wafers and epitaxy, and completely shut down its device module business.

Besides, the company plans to exit nine factories within 18 months, with more closures planned. R&D resources are being reallocated to higher-margin areas, targeting a gross margin goal of 42%. The strategic focus centers on AI data center and industrial laser, both markets with gross margins exceeding 40%.

For fiscal year 2025 (FY25), Coherent is already showing strong momentum, projecting USD 5.781 billion in annual revenue, a 22.8% year-over-year increase. Gross margin is expected to rise to 37.9%, operating margin to 17.8%, and EPS to surge 2.8× to USD 3.45. Quarterly results are equally robust, with explosive growth in the data center and communications segments—driven especially by rising AI demand.

In the data center domain, CTO Julie Sheridan noted that pluggable transceivers will remain a key growth driver, while Coherent is actively investing in co-packaged optics (CPO) and optical circuit switches (OCS) based on liquid crystal technology. The optical interconnect market for data centers is expected to triple from around USD10 billion in 2024 to USD 30 billion by 2030.

(Photo credit: Coherent)

TrendForce 2025 Infrared Sensing Application Market and Branding Strategies
Release: 01 January 2025
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