Coherent manufactures optical components and systems used in AI data centers, communications networks, and industrial applications. The company's primary growth driver is optical transceivers, which convert electrical signals to light for high-speed data transmission between servers. Coherent is a vertically integrated producer, designing and manufacturing internal components such as semiconductor lasers and engineered materials. This integration provides a structural cost advantage, particularly through its transition to high-volume 6-inch Indium Phosphide (InP) production lines. Beyond transceivers, Coherent offers optical circuit switches, co-packaged optics, and data center interconnect systems. The company operates through two segments: Datacenter & Communications and Industrial. The Industrial segment provides lasers and materials for semiconductor manufacturing, EV battery welding, and life sciences. Coherent's business model relies on selling directly to hyperscalers and networking equipment makers, often under multi-year long-term agreements that include volume commitments and demand guarantees. A strategic partnership with Nvidia supports Coherent's focus on AI networking infrastructure. Management's strategy involves expanding internal manufacturing capacity and pruning non-core business units to prioritize high-margin AI and data center opportunities.