US Commerce Department Awards GlobalFoundries $300M for Photonics

U.S. chipmaker GlobalFoundries has entered a letter of intent with the U.S. Department of Commerce, with the government agency set to award the company$300 million to support the development of silicon photonics.The optical technology, which uses light rather than electrical signals for high-bandwidth, energy-efficient data transfers, is used to power AI data centers and has become an area of increased investment interest in recent years.According to GF, the funding will support development of next-generation silicon photonics wafer technologies, novel optical materials and advanced packaging, including its 3D hybrid bonding technology.The investment builds on GF’s SCALE (silicon photonics co-packaged advanced light engine) platform, which targets modular designs, 400 Gb/s data-transfer-rate performance, and a fivefold improvement in energy efficiency compared with current-generation implementations, according to the company.Related:EU Pledges $11.5B for Seven AI GigafactoriesUnder a separate agreement, the Department of Commerce will also receive equity in GF, representing approximately 1% ownership of the company.“With today’s compute supply chain investments, the Trump Administration is accelerating America’s innovation engine,” Secretary of Commerce Howard Lutnick said in a release last week. “These strategic investments will enhance our country’s domestic capabilities, create high-paying jobs and keep America at the forefront of the semiconductor industry.”The $300 million investment follows $1.5 billion in funding GF received from the Department of Commerce in 2024 under the CHIPS and Science Act to expand semiconductor manufacturing in Malta, New York, and Burlington, Vermont.Scaling Photonics for AIThe development comes as part of the Trump administration’s push to expand semiconductor supply chains in the U.S. and reduce reliance on overseas manufacturing.In January, the administration proposed a $150 million equity stake for next-generation semiconductor technology, while in May it committed $2 billion for quantum computing.Currently, silicon photonics supply chains remain concentrated outside the U.S., with major manufacturers including Taiwan Semiconductor Manufacturing Company and Israel-based Tower Semiconductor.GF CEO Tim Breen said the shift to optical connectivity is already underway as AI workloads become more demanding.“Silicon photonics is essential to AI infrastructure,” Breen said in a statement. “For a decade, the industry talked about the shift from copper to optical as something that was coming -- today it is here, moving data at higher bandwidth and improved power efficiency as workloads grow more complex.”Related:Schneider Electric, AMD Unveil Blueprint for AI Factory DeploymentsAbout the AuthorContributing WriterScarlett Evans is a freelance writer with a focus on emerging technologies and the minerals industry. Previously, she served as assistant editor at IoT World Today, where she specialized in robotics and smart city technologies. Scarlett also has a background in the mining and resources sector, with experience at Mine Australia, Mine Technology and Power Technology. She joined Informa in April 2022 before transitioning to freelance work.