What is silicon photonics, and why does AI need it?

Silicon photonics moves data using light instead of electrical signals, letting chips exchange far more data per watt than copper connections allow — a growing bottleneck as AI models and data centers scale up.

How much is GlobalFoundries getting, and does the government now own part of the company?

GlobalFoundries signed a letter of intent for up to $300 million from the Commerce Department’s CHIPS R&D Office, and the department will receive roughly a 1% equity stake in the company as part of the deal.

Is this the same program that funded TSMC's factory expansions?

No. Those subsidies came from the CHIPS Act’s manufacturing incentive program; this award comes from its separate Research and Development Office and targets chip-connection technology rather than new factory construction.

GlobalFoundries Wins $300M US Grant for AI Chip Photonics

Q: Which other companies received funding in this round?

The same package included letters of intent for Kepler, Multibeam Corporation, Extropic, Thintronics, OBSIDIA Semiconductors and Aeluma, bringing the total announced to $874 million across seven companies.

GlobalFoundries has signed a letter of intent with the U.S. Department of Commerce for up to $300 million to scale up silicon photonics manufacturing for artificial intelligence hardware, the company and the Commerce Department announced Wednesday.

The award, issued through the Commerce Department’s CHIPS Research and Development Office, is the largest piece of an $874 million package spread across seven companies working on next-generation chip technology. In exchange, the department will take an equity stake of roughly 1% in GlobalFoundries, according to the announcement.

Why optics, not copper

As AI models grow larger, the electrical connections that move data between and within AI chips are running into fundamental bandwidth and power limits. The silicon photonics push behind this award addresses that by moving data with light instead of electricity, which allows far higher throughput per watt than copper wiring.

GlobalFoundries said the funding will support its SCALE (Silicon Photonics Co-Packaged Advanced Light Engine) platform, which the company is targeting for 400 gigabits-per-second performance and roughly five times the energy efficiency of current interconnects. Work will center on the company’s fabs in Malta, New York, and Burlington, Vermont, and will also fund research into advanced packaging techniques such as 3D hybrid bonding — the same category of technology covered in our explainer on advanced chip packaging.

Broad industry backing

Companies that build or depend on AI infrastructure — including AMD, Broadcom, Cisco, Meta, Microsoft, Nvidia and Qualcomm — issued statements endorsing the investment. Nvidia founder and CEO Jensen Huang said silicon photonics is “essential” to the next generation of AI systems, while AMD Chief Technology Officer Mark Papermaster called the technology key to “the bandwidth, energy efficiency, and system-level connectivity required” as AI scales further.

The GlobalFoundries award was the largest of the seven letters of intent Commerce announced this week; the rest went to Kepler, Multibeam Corporation, Extropic, Thintronics, OBSIDIA Semiconductors and Aeluma for related work on AI memory, chip packaging and low-loss materials. Commerce Secretary Howard Lutnick said the awards would “keep America at the forefront of the semiconductor industry.”

Unlike the CHIPS Act’s earlier factory-construction subsidies — the kind that funded TSMC’s Arizona expansion — this round comes from the Act’s dedicated research and development office and targets underlying chip-connection technology rather than new fab capacity.

Why optics, not copper

Broad industry backing

Frequently asked questions