Shares of (NYSE: COHR) were up 10% as of 11:33 a.m. ET on Tuesday after the company said its silicon carbide semiconductor business will receive $1 billion in investments from two Japanese automakers.  

Denso and Mitsubishi Electric will each invest $500 million in exchange for a 12.5% interest in the new subsidiary. Coherent will own and operate the business, controlling a 75% interest. This move comes as Coherent is seeing growing demand for Datacom transceivers for artificial intelligence (AI).

Coherent says its largest opportunity in the next year is addressing demand for 800G Datacom transceivers. demand for these products is offsetting weakness in other areas of Coherent's business right now.

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Source Fool.com