Finisar shares are up 21% premarket.
AirPods take advantage of these lasers for proximity sensors, stopping and starting music every time you take out an AirPod from your ear.
The recent investment will also be used to increase Finisar's R&D spending and towards "high-volume production" of VCSELs.
Apple's investment will also create more than 500 jobs at the new Sherman plant, including engineers, technicians and maintenance teams. The company runs a plant in Allen, just outside of Dallas. This quarter alone, Apple will apparently purchase 10 times more VCSEL wafers than were previously manufactured worldwide over a similar time period.
"We're extremely proud that our involvement will help transform another American community into a manufacturing powerhouse". Apple has not said what company supplied the first round of lasers, but Lumentum Holdings Inc has seen a surge of business attributed to a single customer that analysts believe is Apple.
"When you combine our proven ability to consistently manufacture exceptional products with our new state-of-the-art Sherman facility, we're confident we can achieve our shared goal of providing consumers with incredibly exciting features", he added.
The move is said to be part of Apple's strategy to lock in the supply of a component that the company believes will be crucial for its future products with AR features.
The investment will enable Apple to "get better supply and better pricing, and it makes it more hard for Android phones to compete", said Gene Munster, a longtime Apple watcher at Loup Ventures. There have been rumors indicating that Apple will use the Face ID on upcoming iPhones and iPads.