Lattice Materials to double Montana capacity with new infrared optics facility and defense funding

Lattice Materials, the Bozeman-based advanced optics manufacturer owned by The Partner Companies, is moving forward with a major facility expansion that is poised to reset the strategic baseline for infrared component manufacturing in the United States. A new 80,000 square-foot plant, more than doubling the company’s existing footprint, will begin construction in spring 2026. This expansion is directly supported by an $18.5 million investment from the Department of War and is aimed at strengthening the domestic production of silicon and germanium optics, two critical inputs for modern defense platforms.

The announcement reinforces a wider reshoring trend in U.S. defense manufacturing and affirms Lattice Materials’ growing role as a domestic supplier of infrared optical components for applications ranging from night vision and thermal imaging to guided missile systems and next-generation fighter aircraft. Backed by both federal investment and a broad strategic capital program by The Partner Companies, the project is as much about strategic security as it is about operational scale.

Why the Pentagon is backing Lattice Materials in Montana and what it says about defense supply chain policy

The $18.5 million in direct federal investment signals a broader shift in how the United States is managing vulnerabilities in its defense supply chain. Lattice Materials is one of the only U.S.-based manufacturers with vertical crystal growth capabilities in both silicon and germanium. These materials are foundational to infrared systems across virtually all military platforms, from the F-35 Joint Strike Fighter to unmanned aerial vehicles and ground-based combat systems such as the Abrams tank and Bradley Fighting Vehicle.

Recent disruptions to global germanium supply, particularly due to export restrictions from China, have underlined the strategic fragility of these mineral-dependent optics systems. The Department of War’s funding is not simply a grant for capacity expansion but a capital allocation to protect national security by hardening supply pathways against geopolitical risk. In that context, the Bozeman expansion becomes a physical representation of defense procurement strategy moving toward domestic control, localized processing, and assured throughput.

This is especially relevant as thermal and infrared detection systems take on greater importance in multi-domain warfare environments, where low-visibility, long-range, and precision-guided technologies dictate outcomes. Lattice Materials’ capabilities in growing large-diameter boules, precision machining, alkali etching, and zone refining position the company as a highly specialized player with relevance across the defense, semiconductor, and photonics value chain.

How The Partner Companies is using Lattice to scale vertically in strategic manufacturing sectors

The Partner Companies, which acquired Lattice Materials in 2016, has made clear through its recent financing activity that it sees defense and photonics manufacturing as long-term strategic growth pillars. In 2025, The Partner Companies raised over $300 million to support scaling across its eleven specialty brands. That capital includes a $100 million equity investment from Tensile Capital Management and a $200 million syndicated credit facility led by Huntington Bank and Key Bank.

Lattice is a central node in this capital strategy. The new facility will allow it to significantly increase capacity in large and standard size boule growth while enabling tighter machining tolerances and broader polishing capabilities. The company is also targeting LEED Gold certification for the facility, underscoring an environmental responsibility narrative that aligns with evolving federal procurement standards.

This scale-up is not merely operational. It is part of The Partner Companies’ broader transformation from a collection of process-specific manufacturers into an integrated ecosystem of mission-critical suppliers with capabilities that span from photochemical etching to high-tolerance precision forming.

Lattice’s contributions go beyond defense. The company supports advanced commercial optics, laser platforms, semiconductor wafer development, and thin-film coatings. These areas are also experiencing secular growth tailwinds, particularly as next-generation computing, photonics, and sensing technologies move out of R&D labs and into industrial applications.

What risks remain in execution, scale, and material assurance?

Despite the strategic momentum, several execution and operational risks remain. Crystal growth, particularly for defense optics, is highly sensitive to process stability, equipment reliability, and specialized labor. The risk of yield degradation, raw material supply disruption, or staffing bottlenecks could affect timelines and throughput, even with the new facility online.

The supply of raw germanium and high-purity silicon remains a structural concern. While the facility expansion addresses downstream manufacturing, Lattice Materials will continue to depend on external sources for feedstock unless vertically integrated mining or refining assets are developed in parallel. This could become an issue if geopolitical tensions with key producing countries continue to escalate or if global demand from the semiconductor sector increases competition for input materials.

Regulatory and budgetary volatility is another risk. While the current funding reflects the Pentagon’s near-term priorities, future defense spending cycles or political shifts could reshape funding mechanisms or procurement volumes. The risk is not in the facility’s viability but in the predictability of future program-level demand.

Why Bozeman may emerge as a next-generation photonics and defense manufacturing hub

Montana is not often cited in conversations about critical minerals or strategic manufacturing, but that may change. Bozeman’s growing photonics ecosystem, including academic institutions like Montana State University, makes it an attractive location for high-precision manufacturing and research collaboration. Lattice Materials could become the anchor of a regional optics and sensing cluster capable of serving not just defense but also aerospace, biomedical imaging, and industrial automation markets.

This move aligns with a broader trend in U.S. reshoring policy that looks beyond coastal hubs to mid-size cities with technical labor pipelines and lower infrastructure costs. The emergence of Bozeman as a defense optics hub could also attract public-private partnerships, adjacent manufacturing startups, and additional federal investment aimed at regional innovation ecosystems.

If executed well, Lattice’s growth may catalyze a new wave of domestic manufacturing investment focused not on low-margin volume production, but on precision components that underpin national security and technological competitiveness.

Key takeaways on what Lattice’s Montana facility expansion signals for the defense optics industry

• Lattice Materials is doubling its manufacturing footprint in Bozeman with an 80,000-square-foot facility backed by $18.5 million from the Department of War.

• The expansion addresses national security concerns over foreign reliance for critical minerals like germanium and silicon used in defense optics.

• The Partner Companies is supporting the scale-up as part of a larger $300 million capital strategy to expand capabilities across its 11 brands.

• New facility investments include advanced growth, machining, and polishing infrastructure for high-precision infrared components.

• The move reinforces reshoring efforts in U.S. defense manufacturing and supports broader semiconductor and photonics industrial policy.

• Risks remain around execution complexity, feedstock security, and future policy shifts that could affect funding continuity.

• Bozeman’s rise as a specialized optics hub could support workforce development and attract further photonics investment.

• Lattice’s integration of ESG benchmarks such as LEED certification highlights evolving procurement standards in defense manufacturing.