GlobalFoundries announced on Wednesday that it has signed a letter of intent with the U.S. Department of Commerce for a $300 million CHIPS Act award to advance silicon photonics research and development.
The award is part of President Donald Trump’s effort to direct CHIPS Act research funding toward critical semiconductor technologies as Washington seeks to strengthen its position in the global race with China. Previously, the administration had committed $150 million for semiconductor manufacturing equipment and $2 billion for quantum computing.
Silicon photonics uses light instead of electrical signals to move data between chips. This enables higher bandwidth and lower power consumption for AI systems.
According to Reuters, the funding is aimed at advancing co-packaged optics (CPO), a technology that integrates silicon photonics directly alongside AI processors to further boost data-transfer speeds and energy efficiency.
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GlobalFoundries said its goals include reaching 400 gigabits per second in data transfer throughput and cutting energy consumption to a fifth of what current-generation systems require. GlobalFoundries plans to conduct the work at its campuses in Malta, New York, and Burlington, Vermont.
The company also said it will accelerate its development of next-generation silicon photonics wafer technologies, novel optical materials and advanced packaging, including proven 3D hybrid bonding, that enable the roll-out of near-packaged optics (NPO) and co-packaged optics (CPO). This work builds directly on GF’s recently introduced SCALE™ (Silicon Photonics Co-Packaged Advanced Light Engine) platform, targeting industry-leading modularity, 400GB per second performance and a five times increase in energy efficiency over current-generation implementations.
A separate agreement linked to the award gives the U.S. Department of Commerce an equity stake in GlobalFoundries representing approximately 1% ownership.
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“Silicon photonics is essential to AI infrastructure,” GlobalFoundries CEO Tim Breen said in a statement. “GlobalFoundries has spent more than a decade building the technology, footprint and ecosystem to lead this transition, and we have the proven manufacturing foundation to scale it — in the United States.”
Commerce Secretary Howard Lutnick said in a statement that the investment would “enhance our country’s domestic capabilities, create high-paying jobs and keep America at the forefront of the semiconductor industry.”
The announcement also received support from major technology companies, including Nvidia. Nvidia CEO Jensen Huang said in a statement that silicon photonics is “essential” to scaling U.S. manufacturing. Executives from AMD, Broadcom, Cisco, Meta, Microsoft, and Qualcomm also issued statements endorsing the investment.