GlobalFoundries has signed a letter of intent with the U.S. Commerce Department to receive $300 million in CHIPS Act R&D funding dedicated to silicon photonics technology – targeting 400Gbps optical interconnects with 5x better energy efficiency than current solutions.

The investment aims to reduce U.S. reliance on overseas photonics production – currently dominated by TSMC and Tower Semiconductor – and accelerate co-packaged optics (CPO) , where optical engines and AI processors are integrated into a single package to cut latency and power.

GF will leverage its SCALE silicon photonics platform across its Malta and Burlington fabs. The project covers novel optical materials, photonic wafer processing, and 3D hybrid bonding, with the goal of delivering U.S.-manufactured optical interconnect solutions for hyperscalers.

As part of the agreement, the Commerce Department will receive approximately 1% equity stake in GlobalFoundries, allowing U.S. taxpayers to share in future upside.

U.S. Commerce Secretary noted that copper interconnects have hit their limit, and photonics + CPO are essential to removing AI scaling bottlenecks – making this a strategic priority for national competitiveness.

From ICgoodFind: $300M for silicon photonics – the U.S. just made CPO a national priority. With copper hitting its ceiling, optical I/O is now the race to watch in AI infrastructure.