Item 1. BUSINESS

Definitions

Coherent Corp. (“Coherent,” the “Company,” “we,” “us,” or “our”), a global leader in materials, networking, and lasers, is a vertically integrated manufacturing company that develops, manufactures, and markets engineered materials, optoelectronic components and devices, and lasers for use in the industrial, communications, electronics, and instrumentation markets. Our headquarters are located at 375 Saxonburg Boulevard, Saxonburg, Pennsylvania 16056, USA. Our telephone number is +1-724-352-4455. Reference to “Coherent,” the “Company,” “we,” “us,” or “our” in this Annual Report on Form 10-K, unless the context requires otherwise, refers to Coherent Corp. and its wholly owned subsidiaries.

The following defined terms are used in this Annual Report on Form 10-K: artificial intelligence (AI); bismuth telluride (Bi2Te3); cadmium telluride (CdTe); carbon dioxide (CO2); chemical vapor deposition (CVD) of materials including diamond; continuous wave (CW); datacenter interconnect (DCI); dense wavelength division multiplexing (DWDM); diversity, equity, and inclusion (DEI); edge-emitting lasers (EELs); extreme-ultraviolet (EUV) lithography; fifth-generation (5G) wireless; fourth-generation (4G) wireless; gallium arsenide (GaAs); gallium antimonide (GaSb), gallium nitride (GaN); Geostationary Operational Environment Satellite Program (GOES); gigabit per second (Gbps); high-definition multimedia interface (HDMI); high-electron-mobility transistor (HEMT); high-energy laser (HEL); indium phosphide (InP); infrared (IR); integrated circuit (IC); intellectual property (IP); kilowatt (kW); light detection and ranging (LiDAR); liquid crystal (LC); liquid crystal on silicon (LCoS); machine learning (ML); metal-oxide-semiconductor field-effect transistor (MOSFET); millimeters (mm); nanometers (nm); near-infrared (NIR); optical channel monitor (OCM); optoelectronic chip hybrid integration platform (OCHIP); original equipment manufacturer (OEM); optical time-domain reflectometer (OTDR); polymerase chain reaction (PCR); radio frequency (RF); reconfigurable optical add/drop multiplexer (ROADM); research and development (R&D); silicon carbide (SiC); terabit per second (Tbps); three-dimensional (3D); ultraviolet (UV); vertical-cavity surface-emitting laser (VCSEL); virtual reality (VR); wavelength division multiplexing (WDM); wavelength selective switching (WSS); zinc selenide (ZnSe); and zinc sulfide (ZnS).

General Description of Business

We develop, manufacture, and market engineered materials, optoelectronic components and devices, optical and laser subsystems and systems for use in the industrial, communications, electronics, and instrumentation markets. We use advanced engineered materials growth technologies and proprietary high-precision fabrication, microassembly, optical thin-film coating, and electronic integration to manufacture complex optoelectronic devices and modules. Our products are deployed in a variety of market verticals, including (i) precision manufacturing; (ii) semiconductor capital equipment; (iii) display capital equipment; (iv) aerospace & defense; (v) telecommunication networks; (vi) data communication networks; (vii) consumer electronics; (viii) automotive; (ix) life sciences; and (x) scientific instruments.

We generate almost all of our revenues, earnings, and cash flows from developing, manufacturing, and marketing a broad portfolio of products and services for our end markets. We also generate revenue, earnings, and cash flows from government-funded research and development contracts relating to the development and manufacture of new technologies, materials, and products.

Our customer base includes original equipment manufacturers; laser end users; system integrators of high-power lasers; manufacturers of equipment and devices for the industrial, communications, electronics, and instrumentation markets; U.S. government prime contractors; and various U.S. government agencies.

Through R&D investments and our strategic acquisitions, we have expanded our portfolio of materials and product platforms. We have a strong core competency in bulk and epitaxial crystal growth that enable differentiated products. We believe that the materials we grow and fabricate are differentiated by one or a combination of unique optical, electrical, magnetic, thermal, and mechanical properties.

Our optics are shaped by precision surfacing techniques to meet the most stringent requirements for flat or curved geometries, functionalized with smooth or structured surfaces, or with patterned metallization. Proprietary processes developed at our global optical coating centers differentiate our products’ durability against HELs and extreme operating environments. Optical coatings also provide the desired spectral characteristics, ranging from the ultraviolet to the far-infrared. We leverage these capabilities to deliver miniature to large-scale precision optical assemblies, including those in combination with thermal-management components, integrated electronics, and software.

We also offer a broad portfolio of compound semiconductor lasers that are used in a variety of applications in our end markets. These lasers enable optical signal transmission, reception, and amplification in terrestrial and submarine communications networks; high-bit-rate server connectivity between and within datacenters; optical communications network monitoring; materials processing; and fast and accurate measurements in biomedical instruments and sensing in consumer electronics. We are a major supplier of silicon carbide substrates for the power electronics market and for the wireless mobile market.

We continue to improve our operational capabilities, develop next-generation products, and invest in new technology platforms to drive growth in the short and the long term. With our strategic focus on fast-growing and sustainable markets, we pursue our mission of enabling the world to be safer, healthier, closer, and more efficient, and strive to attain our vision of a world transformed through innovations vital to a better life today and the sustainability of future generations.

Acquisition and Background of Coherent, Inc.

The acquisition of Coherent, Inc. (“Legacy Coherent”), one of the world’s leading providers of laser and optics-based product solutions, closed on July 1, 2022. For the full fiscal year 2023, Legacy Coherent is included in the combined company and renamed as the Lasers segment. The Lasers segment’s lasers and optics products serve industrial customers in semiconductor and display capital equipment, precision manufacturing, and aerospace & defense, as well as instrumentation customers in life sciences and scientific devices.

Information Regarding Reporting Segments and Foreign Operations

In connection with the acquisition of Coherent, Inc., effective July 1, 2022, the Company realigned its organizational structure into three reporting segments for the purpose of making operational decisions and assessing financial performance: (i) Materials, which previously was referred to as our Compound Semiconductors segment; (ii) Networking, which previously was referred to as our Photonic Solutions segment; and (iii) Lasers segment. Effective July 1, 2022, the Company reports financial information for these three segments.

Financial data regarding our revenues, results of operations, reporting segments, and international sales for the three years ended June 30, 2023, are set forth in the Consolidated Statements of Earnings (Loss) and in Note 14. Segment and Geographic Reporting to our Consolidated Financial Statements, which are included in Item 8 of this Annual Report on Form 10-K, and are incorporated herein by reference. We also discuss certain Risk Factors set forth in Item 1A – Risk Factors of this Annual Report on Form 10-K related to our foreign operations, which are incorporated herein by reference.

Backlog

We define our backlog as bookings that have not been converted to revenues by the end of the reporting period. As of June 30, 2023, our backlog was approximately $2.7 billion, compared with approximately $2.3 billion as of June 30, 2022.

Global Operations

Coherent is headquartered in Saxonburg, Pennsylvania, USA, with R&D, manufacturing, and sales facilities worldwide. Our U.S. production and R&D operations are located in Arizona, California, Colorado, Connecticut, Delaware, Florida, Illinois, Massachusetts, Michigan, Mississippi, New Jersey, New York, Ohio, Oregon, Pennsylvania, and Texas, and our non-U.S. production and R&D operations are based in Australia, China, Finland, Germany, India, Malaysia, the Philippines, Singapore, South Korea, Spain, Sweden, Switzerland, Thailand, the United Kingdom, and Vietnam. We also utilize contract manufacturers and strategic suppliers. In addition to sales offices co-located at most of our manufacturing sites, we have sales and marketing subsidiaries in Belgium, Canada, China, France, Germany, Israel, Italy, Japan, the Netherlands, South Korea, Spain, Switzerland, Taiwan, and the United Kingdom.

Human Capital

Our mission is “Enabling the world to be safer, healthier, closer, and more efficient.”

Our vision is “A world transformed through innovations vital to a better life today and the sustainability of future generations.”

Our core values are: Integrity, Collaboration, Accountability, Respect, and Enthusiasm (I CARE). Our values define who we are and serve as a guide in how we engage with each other, our customers, our suppliers, our investors, and our environment. They serve as a model for how we grow our company in an ethical, scalable, and sustainable manner.

Our workplace is defined by our people. It enables them to show up as their “best self” to work every day. This includes creating an inclusive environment in which every individual is considered a valued and valuable member of the team. We listen to the voice of the employee through focus groups, personal interviews, our open-door policy, and engagement surveys, among other methods. This rich feedback allows us to reflect and adjust our employee-focused initiatives across the globe to create a culture that recognizes their contributions and values their opinions. As a result, our human capital strategies are core to the long-term sustainability and success of the Company.

As of June 30, 2023, the Company employed approximately 27,000 employees worldwide.

			Number of employees			Percent of total
Manufacturing			21,818			82%
Research and development			2,426			9%
Sales, general and administrative			2,378			9%
Total:			26,622			100%

We believe that our efforts in managing our workforce have been effective, as evidenced by a strong culture and a good relationship between the Company and our employees.

• Our People. Our people are critical to our continued success. We provide a workplace that develops, supports, and motivates our employees. We partner with Gallup to implement their Q12 Employee Engagement Survey. The survey questions and Gallup’s resources help us measure our progress toward creating a stronger, more engaged workforce. Based on the results, our employee teams then collaborate on action plans to improve in targeted areas. Our most recent employee engagement survey (2021) saw 94% participation from our global workforce, and the results showed that overall engagement increased by 10% from our original survey.

• Occupational Health and Safety. It is our highest priority to keep our employees, customers, and suppliers safe, as the health and safety of our workforce is paramount to the success of our business. We provide our employees upfront and ongoing safety training to ensure that safety policies and procedures are effectively communicated and implemented. We have experienced employees on-site at each of our manufacturing locations who are tasked with environmental, health, and personal safety education and compliance. We customize our policies to the local requirements and circumstances of each plant.

• Talent Acquisition, Development, and Training. Hiring talented individuals and continuing to develop them are critical to our operations, and we are focused on creating experiences and programs that foster growth and performance. Our Talent Acquisition teams continue their outreach efforts to engage and attract diverse, high-quality talent to our organization. We have a robust succession-planning process that identifies internal candidates for development. We provide all employees the chance to learn and develop critical skills, and we strive to attract, motivate, and retain our talent. Our Leadership Academy offers global leadership development programs for our people leaders to build their leadership capabilities. Tuition reimbursement and funding for growth and development is also built into the annual budget to ensure that Coherent has the skilled workforce we need. Our global internship programs also welcome a new talent pipeline. In fiscal 2023, we pledged $1.3 million to fund STEM educational and research programs in 2023.

• Total Rewards. Our “One Coherent” approach to total rewards provides a competitive total compensation package that attracts, motivates, and retains high-quality talent; matches total rewards of competitors with which we compete for talent; increases transparency of rewards programs, company and segment metrics, and measurement of achievements in relation to challenging objectives; balances fixed costs (benefits and base pay) and variable costs (bonus and equity), with a substantial portion of total direct compensation tied to performance; pays for performance – base, bonus, and equity reflect both company and individual performance; and aligns with the interests of our shareholders. Globally, all non-sales employees participate in a variable incentive program measured on the operating earnings of their business segment. Similarly, sales employees are incentivized on revenue and profit-after-tax attainment. Select employees are eligible to receive equity-based awards, to align employee and shareholder interests. In addition to offering competitive and fair compensation, we also offer a compelling suite of benefits, including comprehensive health benefits to all of our employees globally.

• Diversity and Inclusion. Coherent supports fundamental human rights – values inherent to all human beings. We expect all leaders and employees to treat each other with dignity, fairness, and respect. We are consciously expanding the diversity of our workforce including underrepresented groups in leadership and technical positions, creating growth and development opportunities for our employees, embracing different perspectives, and fostering an inclusive work environment. Recognizing the opportunity to increase gender representation at all levels of the organization, we piloted a Women in Leadership Program in fiscal 2023. This program is a significant investment in the development and advancement of women at Coherent and is designed to further career growth for women through targeted skill development, exposure to and coaching by senior leaders, and opportunities to network with peers across the organization. The Global Advisory Council completed our global DEI program’s strategy and objectives. Communication of this strategy to the organization has already taken place as well as the deployment of our Foundations of DEI training to employees globally to set the foundation of awareness and understanding on the concepts of DEI in our workplace. Our next step is to implement regionally relevant DEI goals in support of the global strategy for each of our global locations with the assistance of Regional Councils. Our organization continues to actively partner with CEO Action for Diversity & Inclusion to advance diversity and inclusion in the workplace. In fiscal 2023, Chair and CEO Chuck Mattera and our Chief HR Officer served as mentors in the CEO Action Mentoring Initiative. This program pairs C-suite leaders with mentees from underrepresented and diverse populations working at the director and vice president levels to take part in a range of professional development activities focused on accelerating the development of diverse senior leaders through mentoring circles. Additional Coherent executive leaders have volunteered to serve as mentors for future cohorts of this program as well as for the Optica Women Scholars Program.

Globally, approximately 44% of the workforce is female, with 11,838 females,14,893 males and 224 undisclosed as of June 30, 2023. In Coherent’s Senior Leadership Team (“SLT”), which consists of directors and above, there are 65 females and 483 males. The SLT meets quarterly to discuss strategy, business trends, company operations, financials, and people programs. Our global footprint is diverse, with approximately 17,900 employees in the Asia-Pacific region, 3,900 in Europe, and 5,200 in the Americas.

Manufacturing Processes

Our success in developing and manufacturing many of our products depends on our ability to manufacture and tailor the optical and physical properties of technically challenging materials, components, and photonics-based solutions across a broad array of industries. The ability to produce, process, and refine these complex materials, and to control their quality and in-process yields, is an expertise of the Company that is critical to our customers. In the markets we serve, there is a limited number of high-quality suppliers of many of the components we manufacture. Aside from datacenter transceivers, there are very few industry-standard products. Ours lasers are displacing conventional technology because they can do the job faster, yield higher quality, provide overall economic benefits, and enable next generation applications.

Our network of worldwide manufacturing sites allows us to manufacture our products in regions that provide cost-effective and risk-management advantages. We employ numerous advanced manufacturing technologies and systems at our manufacturing facilities. These include metal-organic chemical vapor deposition and molecular beam epitaxy reactors, automated computer numeric control optical fabrication, high-throughput thin-film coaters, nanoprecision metrology, and custom-engineered automated furnace controls for crystal growth processes. We provide lasers in the form of gas, semiconductor, solid state crystal or fiber which can also be classified by their output wavelength: ultraviolet, visible, infrared or wavelength tunable. There are also many options in terms of pulsed output versus continuous wave, pulse duration, output power, beam dimensions, etc., which are application specific. Manufacturing products for use across the electromagnetic spectrum requires the capability to repeatedly manufacture products with high yields to atomic tolerances. We continuously update our comprehensive quality management systems that feature manufacturing quality best practices. We are committed to delivering products within specification, on time, and with high quality, with a goal of fully satisfying customers and continually improving.

The Use of Renewable Energy

We continue to focus our efforts to convert locations to renewable energy, and our program is now in its fourth year. We continue to increase our use of renewable energy to power our operations and lower our greenhouse gas footprint. As of April 2023, we have contracts in place to cover over 50% of our total electricity requirements globally from renewable sources. That includes more than 50 sites now procuring 100% renewable electricity. We have on-site solar systems at several facilities that further contribute to our renewable energy efforts. We participate in Apple’s Supplier Clean Energy Program, and all of our Apple production is powered by 100% renewable electricity sources. Our team also works to minimize energy usage, water usage, other raw materials usage, and waste generation.

We have been recognized for excellence in some of these programs by external organizations. For example, our Dallas, Texas, facility has received a local award for its wastewater treatment program for three consecutive years and 19 years in total. Additional information can be found on the Environmental, Social, and Governance (ESG) section of our website at www.coherent.com. The website address is intended to be an inactive textual reference only. None of the information on, or accessible through, Coherent’s website is part of this Annual Report on Form 10-K, nor is it incorporated herein by reference.

Sources of Supply

In our production processes, we use numerous optical, electrical, and mechanical parts that are sourced from third-party suppliers. These include integrated circuits, digital signal processors, mechanical housings, and optical components, and we commonly refer to them as raw materials. Raw materials or sub-components required in the manufacturing process are generally available from several sources. However, in the Lasers segment, we currently purchase several key components and materials, including exotic materials, crystals and optics, used in the manufacture of our products from sole source or limited source suppliers. We also purchase assemblies and turnkey solutions from contract manufacturers based on our proprietary designs. We rely on our own production and design capability to manufacture and specify certain strategic components, crystals, fibers, semiconductor lasers, lasers and laser-based systems.

The continued high quality of and access to these raw materials are critical to the stability and predictability of our manufacturing yields. We specify and test these raw materials at the onset of and throughout the production process. Additional research and capital investment are sometimes needed to better define future raw materials specifications. During COVID-19, we experienced some production delays due to shortages of raw materials, and while we are still seeing some challenges on certain components and infrastructure items, for the most part supplier lead times are reducing and supply is back to pre-pandemic levels. We continue to develop strategic second sources as part of our overall business continuity planning, and occasionally experience problems associated with raw materials not meeting contract specifications for quality or purity. Risks associated with reliance on third parties for the timely and reliable delivery of raw materials are discussed in greater detail in Item 1A. Risk Factors of this Annual Report on Form 10-K.

Reporting Segments and Business Units

The Company’s organizational structure historically had been divided into two reporting segments for the purpose of making operational decisions and assessing financial performance: Photonic Solutions and Compound Semiconductors. With the acquisition of Coherent, Inc., on July 1, 2022, we added a third reporting segment, “Lasers,” which comprises nearly all of the business of Legacy Coherent. In addition, we renamed our existing two reporting segments, from Photonics Solutions to Networking and from Compound Semiconductors to Materials. Beginning with fiscal year 2023, the Company is divided into three reporting segments: (i) Materials, (ii) Networking, and (iii) Lasers. We have reported financial information for these new reporting segments in fiscal year 2023. In addition, prior year numbers were recast to reflect the transfer of two entities between the Networking and Materials segments.

The Networking segment leverages Coherent’s compound semiconductor technology platforms and deep knowledge of end-user applications for our key end markets to deliver differentiated components and subsystems.

The Materials segment is a market leader in engineered materials and optoelectronic devices, such as those based on ZnSe, ZnS, GaAs, InP, GaSb, and SiC. We may from time to time reorganize parts of a given segment or corporate center to drive the focus of certain priorities.

The Lasers segment’s lasers and optics products serve industrial customers in semiconductor and display capital equipment, precision manufacturing, and aerospace & defense, as well as instrumentation customers in life sciences and scientific instrumentation.

Coherent’s segments are organized by business unit. Each of these business units develops and markets products as described below.

Networking
Business Unit			Our Products
Telecommunications			•Products and solutions that enable high-bit-rate interconnects for communications and cloud service providers, including in terrestrial and undersea fiber-optic transmission
Datacom Transceivers			•Pluggable transceivers for Ethernet and Fibre Channel applications in cloud, hyperscale and enterprise datacenter applications, including AI/ML
Advanced Optics			•Fiber optics and precision optics used in projection displays; crystal materials and components for optical communications; high-power UV, visible, and NIR optics for industrial lasers; filters and assemblies for life sciences as well as for sensors, instrumentation, and semiconductor equipment

Materials
Business Unit			Our Products
Engineered Materials & Laser Optics			•Laser optics and accessories for CO2 lasers •High-power fiber and direct-diode laser optics •Infrared thermal imaging optics and assemblies •Polycrystalline materials production including ZnSe, ZnS, and CVD diamond •Thermoelectric components, subassemblies, and systems •Specialty refining, recycling, and materials-recovery services for high-purity rare metals such as selenium and tellurium, as well as related chemical products such as tellurium dioxide •Advanced ceramic and metal-matrix composite products
Laser Components & Subsystems			•High-power semiconductor lasers and laser bars •Laser heads and modules, Q-switched laser modules, high-power uncooled pump laser modules, laser systems for superhard materials processing •Laser processing heads and beam delivery systems for laser materials processing with industrial lasers •High-power fiber lasers for materials processing •EELs, VCSELs, and detectors •High-power pumps for amplifiers •Precision optical assemblies, infrared optics, thin-film coatings, and optical materials •Optical solutions for critical and complex design, engineering, and production challenges in aerospace & defense
New Ventures & Wide-Bandgap Electronics Technologies			•SiC and semiconductor materials for high-frequency and high-power electronic devices
Optoelectronic Devices & Modules			•VCSELs for sensing •EELs and detectors •Integrated circuits for transceivers

Lasers
Business Unit			Our Products
Excimer Lasers			•High pulse energy UV gas and solid-state lasers from 193 nm to 355 nm •Advanced UV optical systems, line beams, and mask-based imaging systems
Solid-State Lasers North America			•Ultrafast lasers from UV to IR wavelengths •High pulse energy UV nanosecond lasers •Low-power continuous-wave lasers and systems •Miniature low-power continuous-wave lasers and systems •High-power ultrafast amplifiers •Continuous-wave UV gas lasers
Solid-State Lasers Europe			•Ultrafast lasers from UV to IR wavelengths •High pulse energy UV nanosecond lasers •Miniature low-power continuous-wave lasers from UV to IR wavelengths
Laser Systems			•Subsystems incorporating various lasers, optics, beam manipulation, monitoring, and control electronics •Standard systems incorporating standard subsystems in a complete mechanical housing, sold to the end user
CO2 Lasers			•kW class continuous-wave gas IR lasers •50 W to 1 kW continuous-wave and pulse gas IR lasers
Aerospace & Defense			•Specialty polishing and coating of optics, optical systems, and assemblies requiring high complexity and precision at dimensions of up to 2 meters •Specialty lasers and laser systems •Specialty crystals •Specialty diode lasers

Markets

Our market-focused businesses are currently organized by technologies and products. Our businesses historically addressed the following primary markets: optical and wireless communications, industrial, aerospace & defense, semiconductor capital equipment, life sciences, consumer electronics, and automotive. In connection with the acquisition of Coherent, effective July 1, 2022, the Company reconfigured its primary markets and is reporting based on the following markets effective July 1, 2022: industrial, communications, electronics, and instrumentation.

Industrial Market Group

*•*Precision Manufacturing Market Vertical. Our laser optics and solutions for the industrial market remain well-positioned. Our vertically integrated and market-leading ZnSe optics and components, due to their inherent low loss at around the 10-micron wavelength, have enabled high-power CO2 laser systems for many decades and remain critical to the steady stream of new deployments as well as to continued operation, serving as replacement optics for the installed base of CO2 lasers. We continue to introduce products that address new and growing applications for low-power CO2 lasers, such as drilling and cutting plastics, textiles, leather, wood, and other organic materials, for which the CO2 laser’s 10-micron wavelength is ideally suited. CO2 lasers are also at the core of EUV lithography systems, which enable a new generation of smaller and more powerful integrated circuits.

Fiber lasers that operate at about the 1-micron wavelength in pulsed or continuous mode have taken a central role in many industrial applications, especially for metal cutting and welding along with precision machining such as marking and microdrilling. We supply a broad range of materials, components, and subsystems that enable many functions within these fiber lasers, from the laser chips that generate the input optical power to the beam delivery systems that direct the output optical power to the target. The same set of Coherent products is at the core of existing and emerging direct-diode laser systems.

Coherent’s broad portfolio of coated optics and crystal materials serves all of these growing laser markets.

*•*Aerospace & Defense Market Vertical. Coherent’s aerospace & defense solutions enable mission-critical capabilities for applications in HELs; contested space; and intelligence, surveillance, and reconnaissance. From uniquely grown single crystals and advanced ceramics, to completely engineered gimbal subsystems, Coherent solutions are embedded on nearly every platform in the field as well as those under development. Coherent laser beam combining and advanced lightweight gimbal technologies, along with domestically produced high-power fiber laser pumps and amplifiers, are enabling next-generation HEL systems and space-based laser communications applications. With the addition of nano-machined single-crystal silicon and grating technologies, together with Coherent’s advanced HEL coating capabilities, we enable advanced spectral beam combining and novel microstructured surface capabilities, which are highly valued within the aerospace & defense industry.

Our advanced missile warning, electro-optical targeting, and imaging systems are deployed on virtually every U.S. fixed-wing and rotary platform. Our advanced sapphire, germanium, and multispectral domes provide unique protection to our advanced imaging, seeker, and laser solutions that are packaged behind them. The domes provide hemispherical coverage for airborne, naval, and ground-based systems.

Our solutions for the Lunar Reconnaissance Orbiter (LRO) provided the first images proving that the astronauts’ footprints on the moon are still there. The LRO continues to orbit the moon and provide rich information for future lunar landing sites. The LRO camera and its more advanced derivatives are the basis for many advanced space imaging applications being pursued by our customers. Our solution for the OSIRIS-REx mission enables the first-ever ability for a NASA satellite to touch down on an asteroid (Bennu) and to retrieve a sample and return it to Earth. Our advanced imaging lenses and windows ensure that our customers’ vehicles are able to safely and accurately dock with the Space Station. Our advanced telescope solution for the Geostationary Lightning Mapper enables the GOES satellites to detect early lightning strikes and predict tornados a full 20 minutes before previous technology. It forms the basis for many of our customers’ advanced multispectral imaging solutions.

Coherent’s Aerospace & Defense (A&D) Division maintains separate business development, IT infrastructure, accounting, finance, engineering, and manufacturing facilities in the United States with strictly controlled access; they are dedicated to our U.S. government-supported contracts.

• Semiconductor Capital Equipment Market Vertical. Semiconductor capital equipment requires advanced materials to meet the need for tighter tolerances, enhanced thermal stability, faster wafer transfer speeds, and reduced stage settling times. Our metal matrix composites and reaction-bonded ceramics enable these applications, thanks to their optimum combination of light weight, strength, hardness, and coefficient of thermal expansion. Our reaction-bonded SiC materials are used to manufacture wafer chucks, lightweight scanning stages, and high-temperature corrosion-resistant wafer support systems. Our cooled SiC mirrors and precision patterned reticles are used in the illumination systems of lithography tools.

Our products enable legacy deep UV lithography equipment that is widely deployed in semiconductor fabs. In the rapidly accelerating market of extreme UV lithography systems, CO2 lasers are used to generate extreme-ultraviolet light. These CO2 lasers and beam delivery systems leverage our broad portfolio of CO2 laser optics, CdTe modulators, and high-power damage-resistant polycrystalline CVD diamond windows to route the powerful laser beam to a tin droplet from which EUV light will emanate. Due to its very high mechanical and thermal performance characteristics, our reaction-bonded SiC is used in structural support systems that are integral to EUV lithography optics to meet critical requirements for optical system stability.

Beyond lasers, we have deep expertise in ceramics and metal matrix composites that semiconductor equipment manufacturers depend on to achieve state-of-the-art semiconductor manufacturing throughput, enabled by the exceptional mechanical and thermal properties of these materials.

*•*Display Market Vertical. We have achieved breakthrough laser innovations essential to manufacture displays for phones, tablets, computers, and televisions. Our laser solutions can improve precision, combining high-spatial precision and selectivity for advanced display production; they can increase productivity, offering fast, large-area processing for current and future-generation modules and panels; and they can maximize yield, maintaining superior yield along the process chain from backplane to individual display.

Communications Market Group

*•*Telecom Market Vertical. Coherent’s optical communications products and technologies enable next-generation high-speed optical transmission systems, networks, and datacenter solutions necessary to meet the accelerating global bandwidth demand.

Demand for our products is largely driven by the continually growing need for additional network bandwidth created by the ongoing proliferation of data and video traffic from video conferencing for work, school, and leisure; video downloads and streaming; live TV; social networking; online gaming; file sharing; enterprise IP/internet traffic; cloud computing; datacenter virtualization; and, more recently, the new optical connectivity needed to support AI/ML algorithms.

We are a global technology leader in optical communications, providing materials, subcomponents, components, modules, and subsystems to optical component and module manufacturers, networking equipment manufacturers, datacenter operators, and telecom service providers. We design products that meet the increasing demands for network bandwidth and data storage.

Our optical communications products can be divided into two main groups, optical transmission and optical transport. Our optical transmission products consist primarily of transmitters, receivers (as stand-alone parts or combined in different integrated solutions), transceivers, transponders, and active optical cables, which provide the fundamental optical-electrical, or optoelectronic, interface for interconnecting the electronic equipment used in networks. This equipment includes switches, routers, and servers used in wireline networks. These products rely on advanced components such as semiconductor lasers and photodetectors, in conjunction with integrated circuits and novel optoelectronic packaging to provide a cost-effective means for transmitting and receiving digital signals over fiber-optic cable at speeds ranging from less than 1 Gbps to more than 800 Gbps, over distances of less than 10 meters to more than 5,000 kilometers, using a wide range of network protocols and physical configurations.

Our optical transport products are at the core of both terrestrial and undersea optical networks, as well as of the emerging new space optical communications connections. Our market-leading 980 nm pump lasers are the key enablers of our erbium-doped fiber amplifiers, which boost the power of optical signals in fiber-optic cables at intervals spanning 80 kilometers, typically, to allow high-speed signals to be transmitted over longer distances. Our 14xx nm pumps enable Raman amplification, based on the stimulated Raman scattering (SRS) effect, of the optical signal traveling over long and ultralong distances. Our latest generation of components for coherent transceivers is critical to a new generation of small-size, long-reach DWDM transmission modules operating from 100 Gbps to 1 Tbps and beyond.

Customers continue to rely on us for our industry-leading optical amplification and embedded monitoring solutions for their next-generation ROADM systems to compensate for inherent signal loss and to monitor signal integrity. Our proprietary OTDR modules allow systems to automatically detect and pinpoint issues along the transmission path in real time. Together with our OCM solutions, which monitor the optical power of the channels transmitted in a fiber-optic link, they enable real-time intelligence to perform preventive maintenance so as to preserve data transmission. In addition, we offer a portfolio of WSS products, which we also incorporate into ROADM line cards and subsystems.

Our proven experience in both transmission and transport allows us to effectively address the emerging DCI market. Our transceivers, submodules, pluggable amplifiers, and configurable line cards are able to meet the requirements of low power consumption, compactness, ease of installation and operation, and cost savings, which are often mandatory features in the DCI market.

•Datacom Market Vertical. We see a major market transition in the datacom market vertical with the dramatic growth in AI and ML.

Network changes to address AI and ML are driving the introduction of higher-speed transceivers at a faster pace than ever before. Only 20 years ago, the highest data rate for optical transceivers was 10G. Today, more than 50% of Coherent’s datacom revenue is generated by 200G and higher data-rate transceivers. Driven by the demands of growing AI/ML adoption, 800G transceivers are shipping in production and we expect the first 1.6T transceivers will ship in the next few years. In five years, the market opportunity for 800G and 1.6T datacom transceivers is expected to be greater than all other types of datacom transceivers combined, largely driven by AI and ML.

At Coherent, we already have a complete portfolio of transceivers matched to the requirements set by AI and ML. These transceivers are protocol-agnostic, meaning the same transceiver hardware can support Ethernet and InfiniBand, as well as proprietary protocols for AI and ML such as NVIDIA’s NVLink.

Over the years, we have made strategic investments that give us a unique level of vertical integration. We not only design and manufacture our transceivers internally, we also design and manufacture many of the components including lasers, detectors, and passive optics. When designing a new transceiver that requires a new component, we either source that component from one of our valued development partners, or we design and manufacture it internally. We decide what to develop internally and what to develop with suppliers based on business case, time to market, and strategic considerations.

800G and 1.6T transceivers require 100G/lane and 200G/lane lasers. The type of laser used is determined by the data rate and the fiber link length. Generally speaking, interconnects in the AI/ML fabric portion of the network (Level 0)

are less than 50 m, interconnects connecting ToR switches to spine switches (Level 1) are up to 500 m, and interconnects connecting switches to routers or routers to routers (Telecom Access) are between 2 and 10 km. Each of these distances and applications are best served by different laser technologies.

For link distances less than 100 m, including Level 0 interconnects and a subset of Level 1 interconnects, VCSELs are used. These are based on our GaAs technology platform. VCSELs are generally the lowest-cost, lowest-power consumption solution, and are the lasers of choice for less than 100 m connections.

Coherent has multiple 6” GaAs VCSEL fabs in the U.S. and Europe. Our 100G/lane VCSELs are in production to support 400G and 800G transceivers.We are working on 200G/lane VCSELs, which will require significant changes in the VCSEL device design and fabrication.

For Level 1 switching for distances greater than can be supported by VCSELs, and for telecom access, single-mode devices are used. These devices are made from InP materials. Coherent has multiple InP fabs in the U.S. and Europe.

For Level 1 link distances greater than 100 m, silicon photonics-based transceivers may be used. All silicon photonics products, including some of our own, need an InP CW laser to generate the light. For Level 1 links greater than 100 m, and for telecom access (2 – 10 km), electro-absorption modulated lasers, or EMLs, may be used. We manufacture 100G/lane EMLs to support 400G and 800G transceivers, such as our EML-based 800G DR8 transceiver. We introduced our 200G/lane EML in 2022.

As we look forward to 200G/lane transceivers, achieving a 10 km reach is a significant challenge, even with EMLs. For that application, we have been developing a laser technology called DFB-MZ, which stands for Distributed Feedback Laser with Mach Zehnder. This is an InP CW laser monolithically integrated with an InP Mach Zehnder modulator. This laser technology will enable 1.6T transceivers with up to 10 km reach.

Electronics Market Group

*•*Consumer Electronics Market Vertical. We manufacture VCSELs, VCSEL arrays, and optical filters for the consumer electronics market. Our VCSEL products leverage our world-class 6-inch GaAs platform, combining our epitaxial wafer growth and wafer fabrication capabilities. Our VCSELs have been used in consumer products such as computer mice and mobile phones for many years. Our VCSELs are also widely deployed in datacenters and HDMI optical cables as well as in vehicle steering wheels. This expertise in VCSEL technology has been leveraged for the growing 3D sensing market. 3D sensing was the first application to drive the demand for relatively large two-dimensional VCSEL arrays. A typical design for 3D sensing requires tens or hundreds of VCSELs per chip in order to scale up the optical power required for, for example, face recognition. Therefore, 3D sensing applications created the need to scale up manufacturing to 6-inch wafer processing. Today, Coherent is one of the very few vertically integrated 6-inch VCSEL manufacturers with a proven track record in high-volume manufacturing of high-reliability, large multi-emitter VCSEL dies designed for 3D sensing. An increasing number of consumer devices are coming on the market with embedded VCSELs, including multiple smartphones and tablets, smart watches, and household robots.

In addition to VCSELs, our products for the consumer electronics market include wafer-scale optics, diffraction gratings, thermoelectric coolers, and substrates for sensing and AR/VR applications.

*•*Automotive Market Vertical. We are a global leader in SiC substrates for power electronics that improve the energy efficiency of electric and hybrid-electric vehicles. Power electronics based on SiC enable systems to achieve significantly improved power utilization and conversion efficiencies, lower operating temperatures, and reduced thermal loads. This in turn enables either increased driving range or reductions in required battery capacity for a given range, which results in a significant cost reduction. Our comprehensive understanding of crystal growth and materials processing was acquired over decades of sustained R&D and manufacturing, allowing us to continuously evolve our technology and IP portfolio. We offer a full range of substrate diameters, including the world’s first 200 mm substrate.

Our industry-leading semiconductor lasers, optics, and materials can be leveraged for LiDAR systems embedded in advanced driver-assistance systems (ADAS) for autonomous vehicles. LiDAR sensors enable ADAS to perform functions such as emergency braking and adaptive cruise control. Coherent’s broad portfolio of components and modules for LiDAR include high-power laser diodes, fiber amplifiers, frequency-modulated continuous-wave detection solutions, optical filters for detection, mirrors for scanning, and thermoelectric coolers for temperature control. Our product offerings include edge-emitters and VCSELs that are capable of providing a wide range of peak powers for direct illumination and imaging for short- and long-range LiDAR solutions. Emission and return windows on LiDAR systems are available in ultrahard bulk materials such as SiC and diamond, and with optical coatings that are water-shedding and oil-resistant. Our thermoelectric coolers are qualified to automotive standards and enable LiDAR systems to operate with optimal performance and efficiency.

New generations of vehicles will be equipped with a greater number of sensors that can monitor a driver’s alertness and let occupants interact with the console using touch sensing or gesture recognition. In the event of a collision, sensors can help provide critical information about the position and attention of occupants to activate restraints and deploy airbags in the best possible manner. Coherent’s products enable the most advanced in-cabin control and monitoring systems for the latest applications in human-vehicle interactions. Our VCSELs are ideal for optical touch sensors integrated in dashboards or steering wheels. Our VCSEL arrays can provide infrared cabin illumination and structured light projection to enable gesture recognition.

Automotive manufacturers continue to differentiate their products with comfort features such as temperature-controlled car seats and cup holders, all of which require thermoelectric devices. We offer thermal-management solutions that are qualified to stringent automotive industry standards and tailored to various applications.

• Wireless Market Vertical. Mobile traffic is increasing as a result of the proliferation of smartphones, tablet computers, and other mobile devices. In the mobile wireless market, we are a global leader in the strategic supply chain for materials and devices utilized in the latest 4G and 5G base station infrastructure. The deployment of 5G wireless is accelerating globally, driving the demand for RF power amplifiers that can operate efficiently in new high-frequency bands and be manufactured on a technology platform that can scale to meet the growing demand. GaN-on-SiC RF power amplifiers have superior performance, compared with devices based on silicon, over a wide spectrum of 5G operating frequencies in the gigahertz range, including in the millimeter-wave bands.

We are a market leader in the technology development and large-volume manufacturing of 100 mm and 150 mm semi-insulating SiC substrates. These substrates are utilized by customers worldwide to manufacture GaN-on-SiC HEMT RF power amplifier devices that are embedded in remote radio heads in 4G and 5G wireless base stations. In areas of high bandwidth demand, 5G antennas with beamforming technology utilizing multiple devices per antenna are expected to be densely deployed, increasing the demand for GaN-on-SiC power amplifiers by approximately an order of magnitude or more versus 4G antennas. Looking forward, we continue to advance the state of the art in SiC substrates, with a strong technology portfolio of 30 active patents using highly differentiated and proprietary manufacturing platforms and technologies including crystal growth, substrate fabrication, and polishing. Our demonstration of the world’s first prototype 200 mm semi-insulating SiC substrates will enable the RF power amplifier market to continue to scale, increasingly replacing functions performed by devices based on silicon and enabling new applications.

The GaN and InP technological platform, which are within the core competencies of Coherent, are key materials also for future 6G high-efficiency power amplifiers and low-noise amplifiers, enabling the best power performance in their respective frequency ranges.

Instrumentation Market Group

• Life Sciences Market Vertical. Within the life sciences end market, we focus on analytical instrumentation that integrates light- and/or thermal-management solutions. We segment this market into three application areas (biotechnology, medical laser, and scientific) and deliver targeted and unique product portfolios for each segment. We vertically integrate from the component level to more complex subassemblies and even full systems. Applications within the biotechnology segment include flow cytometry, genome sequencing, PCR, molecular diagnostics, imaging, and spectroscopy, to name a few. Our broad product portfolio delivers solutions covering illumination, light management, and thermal control. Visible-wavelength lasers and multicolored laser engines provide low-noise, high-performance, reliable light sources. Optical components and subassemblies such as filters, lenses, flow cells, gratings, objective lenses, and patterned reticles are embedded into these instruments to manage light delivery. Our state-of-the-art thermal engines precisely control temperature and uniformity across large areas such as plate and block assemblies, even extending to reagent or sample chilling.

Medical laser and clinical procedures are increasingly performed with systems that integrate our lasers, optics, and thermal solutions. These applications are performed at or near the patient, requiring extreme precision and often complex designs and typically reaching into the NIR and IR wavelengths. Applications are varied, from laser-based treatments and surgeries to medical imaging and point of care. Coherent’s semiconductor laser bars and stacks are used in applications such as hair and wrinkle removal. Crystals and laser cavities, along with custom-designed lens assemblies, are used for ophthalmic, dental, and dermatological surgeries. Thermal components and subassemblies deliver solutions for medical-based applications such as providing heating and cooling to the human body and medical laser temperature control.

• Scientific Instrumentation. Scientific instrumentation rugged enough to be deployed in the field is increasingly essential for testing and monitoring of air, water, food and beverage products, and pharmaceuticals, as environmental and safety concerns become more prevalent. Coherent’s solutions are the building blocks of molecular spectroscopy and imaging-based platforms. These tools typically target environmental applications such as water, air, food and beverage, pharmaceutical, and agricultural testing and monitoring. We continue to leverage our core laser, optics, and temperature-control expertise to deliver custom components and subassembly-level solutions at all wavelengths, from UV to NIR and IR.

Sales and Marketing

We market our products and service through a direct sales force and through representatives and distributors around the world. Our market strategy is focused on understanding our customers’ requirements and building market awareness and acceptance of our products and service. New products are continually being developed and introduced to our new and established customers in all markets.

We have centralized our worldwide sales and strategic marketing functions. Sales offices have been strategically aligned to best serve and distribute products to our worldwide customer base. There are significant cooperation, coordination, and synergies among our business units, which capitalize on the most efficient and appropriate marketing channels to address diverse applications within our markets.

Our sales force develops effective communications with our OEM and end-user customers worldwide. Products are actively marketed through key account relationships, personal selling, select advertising, attendance at trade shows, digital marketing, and customer partnerships. Our sales force includes a highly trained technical sales support team to assist customers in designing, testing, and qualifying our products as key components of our customers’ systems. As of June 30, 2023, we employed approximately 778 individuals in sales, marketing, and support.

We do business with a number of customers in the aerospace & defense industry, who in turn generally contract with a governmental entity, typically a U.S. government agency.

We had one customer who contributed more than 10% of revenue during fiscal 2023.

Customers

The representative groups of customers that we are able to disclose * are as follows:

Networking
Business Unit:			Our Customers Are:			Representative Customers:*
Telecommunications			Worldwide providers of telecommunications and CATV network systems and subsystems; telecommunications service providers			•Ciena Corporation •Cisco Systems, Inc. •Fujitsu Network Communications •NEC Corporation •Nokia Corporation •Windstream Holdings, Inc.
Datacom Transceivers			Cloud service providers, enterprises with internal datacom networks, datacom OEMs, telecom OEMs			•Alibaba Group •Cisco Systems, Inc. •Extreme Networks, Inc. •H3C Technologies Co. Ltd. •Hewlett Packard Enterprise, Co. •Tencent
Advanced Optics			Global manufacturers of industrial and medical laser optics and crystals including commercial and consumer products used in a wide array of instruments, sensors, fiber lasers, displays, and projection devices			•Corning Incorporated •Cytek Biosciences, Inc. •Han’s Laser Technology Industry Group Co. Ltd. •Zygo Corporation

• Many of our customers (including many of our largest customers) require us to maintain confidentiality of our business relationship, in part by not disclosing their names.

Materials
Business Unit:			Our Customers Are:			Representative Customers:*
Engineered Materials & Laser Optics			OEM and system integrators of industrial, medical, and personal comfort; laser end users who require replacement optics for their existing laser systems; manufacturers of semiconductor capital equipment; mineral processors and refiners			•Applied Materials, Inc. •Beckman Coulter •Bystronic Laser AG •Carl Zeiss AG •Nikon Corporation •TRUMPF GmbH + Co. KG
Laser Components & Subsystems			Manufacturers of industrial laser components, optical communications equipment, and consumer technology applications; automotive manufacturers; OEM and subsystem integrators of machine vision, biomedical instruments, and fiber lasers; laser cutting machines for superhard materials			•Ford Motor Company •Laserline GmbH
New Ventures & Wide-Bandgap Electronics Technologies			Manufacturers and developers of equipment and devices for high-power inverters and converters, voltage-switching, power-conversion systems, and high-power RF electronics			•Dongguan Tianyu Semiconductor Technology Co., Ltd. •Hyundai Mobis Co., Ltd. •Infineon Technologies AG •Mitsubishi Corporation •Qorvo, Inc. •Sumitomo Electric Device Innovations Inc.
Optoelectronic Devices and Modules			Manufacturers of consumer electronics and datacom transceivers			•Apple Inc.

Lasers
Business Unit:			Our Customers Are:			Representative Customers:*
Excimer Lasers			Manufacturers of displays, semiconductor capital equipment, therapeutic, medical, and scientific research			•Advanced Process Systems Corporation •Carl Zeiss Meditec AG •Dukin Co. Ltd. •JSW Atkina Systems Co. Ltd •JSW Electromechanical Trading (Shanghai) Co. Ltd.
Solid State Lasers - North America			Manufacturers of displays and semiconductor capital equipment, equipment for life sciences instrumentation, scientific research, and various other industrial			•Agilent Biosciences (Hangzhou) Co. Ltd •Asclepion Laser Technologies GmbH •Lasertec USA, Inc. •Sumitomo Heavy Industries Ltd.
Solid State Lasers - Europe			Manufacturers of displays and, semiconductor capital equipment, equipment for life sciences instrumentation and research, and various other industrial			•Hitachi High-Tech Corporation •LG Electronics, Inc. •Meerecompany Incorporated •Philoptics Co, Ltd.

Laser Systems			Manufacturers of equipment for various industrial market, cutting, and hole drilling with a focus on medical device manufacturing and automotive/EV/batteries			•Align Technology, Inc. •Siemens AG
CO2 Lasers			Manufacturers of semiconductor capital equipment and equipment for various industrial marking, cutting, hole-drilling, and annealing of organic materials			•Körber Technologies GmbH •Nikon Corporation •Siemens AG
Aerospace & Defense			Internal crystal and diode supply; manufacturers of ground and space astronomy, and classified aerospace & defense solutions			•Lockheed Martin Corporation •Raytheon Company

Competition

Coherent is a global leader in many of its product families. We compete, in part, on our core competencies from materials to systems, our differentiated products and service, and the sustainability of our competitive advantages. We also compete by leveraging our intellectual property, ability to scale, product quality, on-time delivery, and technical support. We believe that our vertical integration, manufacturing facilities and equipment, experienced technical and manufacturing employees, and worldwide marketing and distribution channels provide us with competitive advantages. The following are among our top competitors (in alphabetic order):

• Broadcom Corporation

• IDEX Corporation

• InnoLight Technology (Suzhou) Ltd.

• IPG Photonics, Inc.

• Lumentum Operations LLC

• MKS Instruments, Inc.

• Molex, LLC

• O-Net Technologies (Shenzhen) Group Co., Ltd.

• Trumpf GmbH + Co. KG

• Wolfspeed, Inc

In addition to competitors who manufacture products similar to those we produce, there are other technologies and products available that may compete with our technologies and products.

Our Strategy

Our strategy is to grow businesses with world-class engineered materials and laser processing capabilities to advance our current customers’ strategies, reach new markets through innovative technologies and platforms, and enable new applications in large and growing markets. A key strategy of ours is to develop and manufacture high-performance materials and, in certain cases, components incorporating those materials, that are differentiated from those produced by our competitors. We focus on providing components that are critical to the heart of our customers’ products that serve the applications mentioned above.

We continue to grow the number and size of our key accounts. A significant portion of our business is based on sales orders with market leaders, which enables our forward planning and production efficiencies. We intend to continue capitalizing and executing on this proven model, participating effectively in the growth of the markets discussed above, and continuing our focus on operational excellence as we execute our primary business strategies.

Research and Development

During the fiscal year ended June 30, 2023, we continued to identify, invest in, and focus our research and development on new products and platform technologies in an effort to accelerate our organic growth. This approach is managed under a disciplined innovation program that we refer to as the Coherent Phase Gate Process.

We devote significant resources to R&D programs directed at the continuous improvement of our existing products and processes, and to the timely development of new materials, technologies, platforms, and products. We believe that our R&D activities are essential to establishing and maintaining a leadership position in each of the markets we serve. In addition, certain manufacturing personnel support or participate in our research and development efforts on an ongoing basis. We believe the close interaction between the development and manufacturing functions enhances the direction of our projects, reducing costs and accelerating technology transfers. It also offers development opportunities to our employees.

During the fiscal year ended June 30, 2023, we focused our R&D investments in the following areas:

Networking
Area of Development:			Our R&D Investments:
Photonics design			Continue to develop and improve crystal materials, precision optical parts, and laser device components for photonics applications; develop new platforms and capabilities
Datacom transceivers			Continue cost reduction on 10G-100G products by leveraging our engineering resources and manufacturing scale; continue to develop high-end 200G/400G/800G/1.6T products, including RF and packaging designs; explore high-density, high-bandwidth co-packaged designs through silicon photonics; continue to develop vertically integrated designs, including with lasers and ICs
Coherent optics and transceivers			Drive further integration to reduce size and power consumption; increase bandwidth to enable 100G/200G/400G coherent transceivers; optimize product cost with new design architectures and more efficient manufacturing flow
Integrated circuits			Develop high-speed integrated circuits for coherent optical communications
Pump lasers			Continue to invest in our next-generation GaAs pump laser portfolio and flexible manufacturing footprint to address evolving terrestrial and undersea markets
Develop InP growth and processing capability together with associated packaging technology for Raman amplification applications
Optical amplifiers and subsystems			Invest in and broaden the range of amplifiers and integrated subsystems, including ROADMs
Optoelectronic chip hybrid integration platform (OCHIP)			Develop wafer-scale assembly technologies and processes for integration of lasers, optics, and ICs
Silicon photonics devices			Develop silicon-based photonic ICs for coherent and direct-detection transceivers and co-packaging solutions
WSS			Develop LC and LCoS technologies and associated module designs for WSS; invest in manufacturing equipment, including the WSS automated assembly platform
Optical monitoring			Continue optical channel monitoring investment
Develop OTDRs to monitor the health of the fiber plant
Micro-optics manufacturing			Shift toward smaller, more compact optics and automated assembly platforms and packages
Invest in manufacturing equipment for computerized processes
Materials
Area of Development:			Our R&D Investments:

High-power laser diodes Semiconductor lasers Devices for optical communications, sensing, and high-volume manufacturing			Increase output power and reliability of edge-emitting laser diodes for fiber laser, optical communications, and sensing applications
Develop high-power VCSELs, including multi-junction VCSELs for 3D sensing and consumer devices as well as next-generation, high-speed VCSELs for datacom applications
Develop high-power and high-speed InP lasers, detectors, and components for applications in optical communications and sensing
High-power beam delivery			Develop multi-kW beam delivery systems and cables for welding and cutting
CVD diamond technology			Develop CVD diamond for EUV applications and as substrates for high-performance RF devices
Broaden our portfolio beyond infrared window applications
SiC technology SiC epitaxial wafers, devices, and modules			Develop advanced SiC substrate growth technologies to support emerging markets in GaN RF and SiC power electronics
Continuous improvement to maintain world-class, high-quality, large-diameter substrates and epitaxial wafers
Develop SiC epitaxial wafers, SiC diodes and MOSFET devices, and SiC power modules
Thermoelectric materials and devices			Continue to develop leading Bi2Te3 materials for thermoelectric cooling/heating
Focus on thermoelectric power-generation capability in order to introduce new products
Metal matrix composites and reaction-bonded ceramics			Support industrial customers in developing application-specific material wear-out, light-weight high mechanical stability materials, and thermal-management solutions
Fiber laser technologies			Develop high-power fiber laser technologies for aerospace & defense and commercial applications
High-speed ICs			Develop high-performance analog TIAs, laser drivers, and clock and data-recovery retimer ICs
Battery technology			Develop technology for lithium-ion batteries and recycling processes
Additive manufacturing			Develop alloys and multibeam delivery systems for laser additive manufacturing
Develop binder jet additive manufacturing for advanced ceramic components

Lasers
Area of Development:			Our R&D Investments:
Diode-pumped Solid-State Lasers			Continue to develop solid-state lasers for industrial applications for materials processing, instrumentation, and scientific applications, including extension of wavelengths using nonlinear optics (harmonic generation), especially into the ultraviolet wavelength range.
			Continuous-wave operation as well as pulsed systems with pulses in the range of 400 fs to 100 ns.
Ultrafast Fiber Lasers			Continued development of industrial femtosecond fiber lasers with 50-200 μJ pulse energy, including UV generation, for semiconductor capital equipment and display manufacturing. Power-scaling and wavelength range extension for low energy (<1 μJ), high repetition rate (80 MHz), femtosecond fiber laser systems used in multi-photon imaging.
Femtosecond Oscillators and Amplifiers			Continue to develop ultrafast laser systems for scientific applications based on Ti:Sapphire and Yb-doped gain materials with sub-100-fs pulse duration.
Optically-pumped Semiconductor Lasers (OPSL)			Continue to broaden the product portfolio of continuous-wave, visible and ultraviolet OPSL by offering new wavelengths, increasing the output power and further reducing the product footprint. This includes the development of single-frequency ultraviolet cw OPSL-based systems.

Semiconductor Lasers			Increase output power and reliability of GaAs- and InP-based edge-emitting semiconductor lasers (single emitters, bars, stacks and fiber-coupled modules) for laser pumping, industrial, and defense applications.
Excimer Lasers and Excimer Laser Tools			Continue to support existing excimer laser-based applications in display manufacturing, instrumentation, and materials processing. Increase output power and reliability of pulsed excimer lasers (wavelength range of 193 nm to 308 nm) and continue to develop new excimer laser-based tools for display manufacturing.
CO2 Lasers			Continue to develop medium-power slab waveguide CO2 lasers (20 W to 1 kW) used in industrial applications with an emphasis on improved reliability and decreased cost. Continue to develop and support new applications for high-power slab waveguide CO2 lasers with average output powers of up to 8 kW.
Laser Tools			Continue to develop laser-based tools used for marking, cutting, and welding applications with an emphasis on process control.
Laser Crystal and Nonlinear Crystal Growth			Support and optimize growth processes of laser crystals (e.g., Nd:YVO4, Nd:YAG, Yb:YAG, Yb:KYW, Yb:CALGO) and nonlinear crystals (e.g., LBO, BBO) used in laser systems. Continued improvement in crystal quality (absorption, homogeneity, scattering) and in crystal lifetime during laser operation.
Optical Fibers			Continue to broaden the portfolio of passive optical fibers and doped active fibers (doped with Nd, Yb, Er, Tm) and develop novel fiber designs for improved fiber laser performance.
Optical Components for Laser Systems			Continued development of optical components used in laser systems, including isolators, rotators, volume Bragg gratings. Continued improvement of optical coatings for laser mirrors and lenses.
Large-scale Mirrors and Lenses			Invest in fabrication technologies for large-sized lenses and mirrors used in astronomy and aerospace & defense applications. Support fabrication of large-dimension cylinder lenses for excimer-based laser tools used in display manufacturing.

Other R&D
Area of Development:			Our R&D Investments:
Space-based laser communications			Develop technology and devices for space-based laser communications

Research and development expenditures were $500 million, $377 million, and $330 million for the fiscal years 2023, 2022, and 2021, respectively.

Import and Export Compliance

We are required to comply with all relevant import/export and economic sanctions laws and regulations, including:

• The import regulations administered by U.S. Customs and Border Protection;

• The International Traffic in Arms Regulations administered by the U.S. Department of State, Directorate of Defense Trade Controls, which among other things impose licensing requirements on the export from the United States of certain defense articles and defense services, generally including items that are specially designed or adapted for a military application and/or listed on the United States Munitions List;

• The Export Administration Regulations administered by the U.S. Department of Commerce, Bureau of Industry and Security, which among other things impose licensing requirements on certain dual-use goods, technology, and software; and

• The regulations administered by the U.S. Department of the Treasury, Office of Foreign Assets Control, implementing economic sanctions against designated countries, governments, and persons based on U.S. foreign policy and national security considerations.

Foreign governments also have similar import and export control, and sanctions, laws, and regulations. For additional discussion regarding our import, export, and sanctions compliance, see the discussion in Item 1A. Risk Factors of this Annual Report on Form 10-K.

Trade Secrets, Patents, and Trademarks

Our use of trade secrets, proprietary know-how, trademarks, copyrights, patents, contractual confidentiality, and IP ownership provisions helps us develop and maintain our competitive position with respect to our products and manufacturing processes. We aggressively pursue process and product patents in certain areas of our businesses and in certain jurisdictions across the globe. We have entered into selective intellectual property licensing agreements. We have confidentiality and noncompetition agreements with certain personnel. We require our U.S. employees to sign a confidentiality and noncompetition agreement upon commencement of their employment with us. As of June 30, 2023, we had a total of approximately 3,000 patents globally.

Executive Officers of the Registrant

The executive officers of the Company and their respective ages and positions as of June 30, 2023, are set forth below. Each executive officer listed has been appointed by the Board of Directors to serve until removed or until a successor is appointed and qualified.

Name						Age						Position
Vincent D. Mattera, Jr.						67						Chair and Chief Executive Officer
Giovanni Barbarossa						61						Chief Strategy Officer and President, Materials
Walter R. Bashaw II						58						President
Mary Jane Raymond						62						Chief Financial Officer and Treasurer
Christopher Koeppen						52						Chief Innovation Officer
Julie Sheridan Eng						56						Chief Technology Officer
Ronald Basso						63						Chief Legal and Compliance Officer & Secretary
Mark Sobey						63						President, Lasers

Vincent D. Mattera, Jr. initially served as a member of the Coherent Board from 2000 to 2002. Dr. Mattera joined the Company as a Vice President in 2004, and served as Executive Vice President from January 2010 to November 2013, when he became the Chief Operating Officer. He was re-appointed to the Board in 2012. In November 2014, Dr. Mattera became the President and Chief Operating Officer. In September 2016, Dr. Mattera became the Company’s third President and Chief Executive Officer in 45 years and served as the Company’s President through June 2019, when the roles of President and Chief Executive Officer were separated. Dr. Mattera became the Company’s Board Chair immediately following the 2021 Annual Meeting. During his career at Coherent, he has assumed successively broader management roles, including as a lead architect of the Company’s growth and diversification strategies. The platforms that the Company has added under his leadership have contributed to positioning the Company into large and transformative global growth markets while increasing our global reach, deepening our technology and IP portfolio, broadening our product roadmap and customer base, and increasing the potential of the Company.

Prior to joining the Company as an executive, Dr. Mattera had a continuous 20-year career in the Optoelectronic Device Division of AT&T Bell Laboratories, Lucent Technologies and Agere Systems, during which he led the development and manufacturing of semiconductor laser-based materials and devices for optical and data communications networks. Dr. Mattera has 39 years of leadership experience in the compound semiconductor materials and device technology, operations and markets that are core to Company’s business and strategy. Dr. Mattera holds a B.S. degree in chemistry from the University of Rhode Island (1979), and a Ph.D. in chemistry from Brown University (1984). He completed the Stanford University Executive Program in 1996. He is a member of Business Roundtable and serves on the board of the U.S.-Japan Business Council and of the Cleveland Clinic Florida Regional Board of Directors.

Giovanni Barbarossa joined the Company in 2012 and has been the Chief Strategy Officer of the Company and the President of the Materials Segment since July 2019. Previously, he was the Chief Technology Officer of the Company and the President of the Laser Solutions Segment. Dr. Barbarossa was employed at Avanex Corporation from 2000 through 2009, serving in various executive positions in product development and general management, ultimately serving as the President and Chief Executive Officer. When Avanex merged with Bookham Technology, forming Oclaro, Inc. ,Dr. Barbarossa became a member of the Board of Directors of Oclaro and served as such from 2009 to 2012. Previously, he had management responsibilities at British Telecom, AT&T Bell Labs, Lucent Technologies, and Hewlett Packard. Dr. Barbarossa graduated from the University of Bari, Italy, with a B.S. in Electrical Engineering, and has a Ph.D. in Photonics from the University of Glasgow, U.K.

Walter R. Bashaw II joined the Company in 2018 and has been President of the Company since July 2019. Mr. Bashaw previously served as Vice President of Strategy. In this role, he was primarily responsible for the Company’s M&A and integration work. Prior to joining the Company, Mr. Bashaw was a senior partner at the law firm of Sherrard, German & Kelly, P.C. in Pittsburgh, Pennsylvania, where his areas of expertise were corporate law, mergers and acquisitions, and technology planning. Mr. Bashaw holds a J.D. from the University of Pittsburgh School of Law, from which he graduated cum laude and at which he was the editor-in-chief of the University of Pittsburgh Journal of Law and Commerce. He holds a B.S. in Logistics from the Pennsylvania State University.

Mary Jane Raymond has been Chief Financial Officer and Treasurer of the Company since March 2014. Previously, Ms. Raymond was Executive Vice President and Chief Financial Officer of Hudson Global Inc., from 2005 to 2013. Ms. Raymond was the Chief Risk Officer and Vice President and Corporate Controller at Dun and Bradstreet, Inc., from 2002 to 2005. In addition, she was the Vice President, Merger Integration, at Lucent Technologies, Inc., from 1997 to 2002, and held several management positions at Cummins Engine Company from 1988 to 1997. In 2019, Ms. Raymond was named to the Board of Directors and Audit Committee of Veeco, Inc. Ms. Raymond holds a B.A. degree in Public Management from St. Joseph’s University, and an MBA from Stanford University.

Christopher Koeppen joined the Company in 2011 following the acquisition of Aegis Lightwave, Inc., where he served as General Manager, Aegis-NJ. He was named General Manager of the Agile Network Products Division in 2012 and Director of Corporate Strategic Technology Planning in 2015. He then served as Vice President of the Industrial Laser Group and Corporate Strategic Technology Planning from 2017 until his appointment as Chief Technology Officer in 2019. In October, 2022, Dr. Koeppen was appointed Chief Innovation Officer of the Company. Previously, Dr. Koeppen was co-founder and CEO of CardinalPoint Optics, prior to its acquisition by Aegis Lightwave. He has more than two decades of progressively increasing general and technology management experience in high-tech companies, including at Meriton Networks, Mahi Networks, Photuris, and Lucent Technologies. Dr. Koeppen holds a Ph.D. in Physics from the University of Pennsylvania, where he was an AT&T Bell Laboratories Scholar, and B.S. degrees in Physics and Mathematics from the Pennsylvania State University.

Julie Sheridan Eng was appointed Chief Technology Officer of the Company in October 2022. Prior to becoming CTO, Dr. Eng, 56, served as Senior Vice President and General Manager of the Company’s Optoelectronic Devices and Modules Business Unit. Dr. Eng joined the Company in 2019 with the acquisition of Finisar Corporation, where she held various senior management positions, including Executive Vice President and General Manager of 3D Sensing, and Executive Vice President of Datacom Engineering. Dr. Eng spent over 20 years in the optoelectronics and optical communications industries, including roles at AT&T, Lucent, and Agere. Dr. Eng received her PhD and M.S. in electrical Engineering from Stanford, and an M.S. and B.A. from Bryn Mawr College (summa cum laude) and a B.S., with honors from the California Institute of Technology (Caltech).

Ronald Basso joined the Company in 2019 as Vice President, Corporate Development, and was named Chief Legal and Compliance Officer and Corporate Secretary in March 2022. Previously, Mr. Basso was the Executive Vice President of Business Development, General Counsel & Secretary for Black Box Corporation for six years. Before that, his 28-year career at Buchanan Ingersoll & Rooney PC involved significant client engagements on corporate, governance, securities, capital markets transactions, M&A, and executive compensation matters. He served on the Coherent IPO team in 1987 and as Coherent’s SEC counsel for 25 years until he joined Black Box. Mr. Basso holds a bachelor’s degree (summa cum laude) in Economics and a Juris Doctor degree (Order of the Coif) from the University of Pittsburgh.

Mark Sobey became an executive officer of the Company and was named President of the Lasers segment following the closing of our acquisition of Legacy Coherent in July 2022. Previously, Dr. Sobey served as Legacy Coherent’s, Chief Operating Officer from April 2020 to July 2022. He was previously Executive Vice President and General Manager of Coherent, Inc.’s, OEM Laser Sources until being promoted to COO, and before that he was Executive Vice President and General Manager of Specialty Laser Systems (SLS) from 2010 to 2016, and Vice President and General Manager of SLS from 2007 until 2010. Prior to his service with Legacy Coherent, Dr. Sobey spent over 20 years in the laser and fiber optics telecommunications industries, including senior vice president roles in product management at Cymer and in global sales at JDS Uniphase. He received his Ph.D. in Engineering and B.Sc. in Physics from the University of Strathclyde in Scotland. In July 2023, Dr. Sobey announced his plan to retire from the Company effective September 1, 2023.

Availability of Information

Our internet address is www.coherent.com. Information contained on our website is not part of, and should not be construed as being incorporated by reference into, this Annual Report on Form 10-K. We post the following reports on our website as soon as reasonably practical after they are electronically filed with or furnished to the SEC: our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, and any amendments to those reports or statements filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. In addition, we post our proxy statements on Schedule 14A related to our annual shareholders’ meetings as well as reports filed by our directors, officers, and 10% beneficial owners pursuant to Section 16 of the Exchange Act. In addition, all filings are available via the SEC’s website (www.sec.gov). We also make our corporate governance documents available on our website, including the Company’s Code of Ethical Business Conduct, Governance Guidelines, and the charters for our board committees. All such documents are located on the Investors page of our website and are available free of charge.