- Aims to push data transfer speeds to 400 gigabits per second — roughly five times more energy-efficient than current implementations.
- Taiwan’s TSMC and Israel’s Tower Semiconductor are among the dominant players in the space, leaving Washington uneasy about single points of failure.
The US government is betting $300 million that the future of AI data centres runs on light, not electricity.
GlobalFoundries said it has signed a letter of intent with the Department of Commerce to receive the award under the CHIPS Act, targeting research and development of silicon photonics — a technology that swaps electrical signals for photons to shuttle data between chips at higher speeds and far lower power.
The funding falls under President Donald Trump’s push to steer CHIPS Act research dollars toward semiconductor technologies deemed critical for national competitiveness against China. The administration has already earmarked $150 million for chipmaking equipment and $2 billion for quantum computing.
Light-speed ambition
Silicon photonics has become a fixation for the chip industry as AI workloads strain conventional interconnects. By using light instead of electrons, the technology can deliver dramatically more bandwidth per watt — a metric that matters when hyperscale data centres burn through enough electricity to power small cities.
A key target is co-packaged optics, or CPO: integrating photonic components directly alongside AI processors to slash the distance data must travel as electrical signals. GlobalFoundries said it aims to push data transfer speeds to 400 gigabits per second — roughly five times more energy-efficient than current implementations.
“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,” CEO Tim Breen said in a statement.
Reshoring the supply chain
There is a geopolitical calculus baked into the award. Much of the silicon photonics and advanced optical packaging supply chain sits outside the United States today. Taiwan’s TSMC and Israel’s Tower Semiconductor are among the dominant players in the space, leaving Washington uneasy about single points of failure.
The R&D work will run through GlobalFoundries’ facilities in Malta, New York, and Burlington, Vermont — both legacy sites the company has steadily upgraded as it pivots toward specialty and differentiated manufacturing rather than chasing the leading-edge logic race dominated by TSMC and Samsung.
The award is modest by CHIPS Act standards — GlobalFoundries separately secured up to $1.587 billion in direct funding under the program’s manufacturing incentives — but the signal carries weight. Silicon photonics is moving from lab curiosity to infrastructure necessity, and the administration is making clear it wants that infrastructure built on American soil.