Apple Backs Finisar With $390 Million for Face ID Technology

Apple is spending $390 million to boost production from a maker of laser technology that’s critical for new iPhone X features such as facial recognition, according to Bloomberg.

Apple, whose products can stretch the manufacturing capabilities of suppliers, will invest the money in Finisar from a $1 billion manufacturing fund announced earlier this year with the aim of creating more American jobs. Finisar will use the funds to reopen a plant in Sherman, Texas, that will employ 500 people.

The design process at Apple balances creating ground-breaking technology against the manufacturing challenge of finding suppliers who can provide the number of components needed to put new features inside hundreds of millions of handsets. Many of Apple’s new facial-recognition features, including one in which emojis mimic a person’s facial expressions, require lasers that track tiny movements. The technology, which uses vertical-cavity surface-emitting lasers, is also part of the company’s emerging augmented reality efforts.

Gene Munster, a longtime Apple analyst who now serves as a partner at Loup Ventures, said the deal gives Apple a competitive advantage for smartphone-based augmented reality products. "This investment shows the company is doubling down on AR again, and locks down the VCSEL market, which will make it tough for other smartphone players to compete in AR," he wrote. The deal also suggests Apple will include these sensors in additional products.

Founded in 1988 and with 14,000 employees, Finisar has primarily made components used in networking and the internet, including voice and video communications, storage and television. Its other customers include Cisco Systems, Hewlett Packard Enterprise and Huawei.