“When everyone is digging for gold, sell shovels.”  
  
It’s an idiom that came from the gold rush, where those selling equipment could have huge, consistent returns as compared to the unreliability of digging for gold. 
  
Similarly, Coherent is capitalizing on new market trends in computer chips and big data by selling large, expensive, and specialized equipment to chip manufacturing companies. This move enables the company to capitalize on the trend of increasingly large, graphically complex video games and the emerging market of generative AI. Both of these are heavily reliant on precisely manufactured, costly processing components. Machines of this complexity can fill entire rooms and cost millions of dollars, so “selling shovels” in this case can be pretty profitable. 
  
Initially, they were an American laser optics company. They were acquired by a Vietnamese firm, II-VI, which adopted the name Coherent. Naturally, they chose to expand into Vietnam as the next step in their global corporation, primarily due to labor costs, proximity to precursor materials, and political stability. They are also benefiting from Vietnam’s expanding education system, which enables their policy of hiring primarily local employees to improve employee retention. 
  
Beyond Vietnam, Coherent has locations in dozens of countries. They are entirely vertically integrated, from harvesting raw materials in the Philippines to producing the finished product in the US. Their massive scale, combined with the inherent barrier to entry into their industry (many millions in equipment capital to create a single unit of deliverables), protects them from competition. 
  
After lunch, we had a sports competition against UEF. The first game was soccer against the UEF soccer team. Playing in the intense heat and humidity of an indoor Vietnamese gym presented a new level of difficulty, and by the end, they were taking it easy on us. Afterwards, we played a folk game with teams of UEF and Pitt students mixed. I didn’t particularly understand the rules or nuance of the game, but I guess that’s what makes it a folk game. Overall, the event was an excellent opportunity to bond with the UEF students.