U.S. chipmaker GlobalFoundries has signed a letter of intent with the U.S. Department of Commerce under which the government agency will award the company $300 million to advance silicon photonics technology for AI infrastructure.

The funding will support the development of next-generation silicon photonics wafer technologies, novel optical materials, and advanced packaging, including GF's 3D hybrid bonding technology. Silicon photonics uses light rather than electrical signals to enable high-bandwidth, energy-efficient data transfers, making it a critical component for AI data centers, where the volume of data moving between GPUs and other processors during model training and inference has pushed traditional copper-based interconnects toward their physical limits on power consumption and signal reach.

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.

Under a separate agreement, the Department of Commerce will also receive equity in GlobalFoundries representing approximately 1% ownership of the company. The equity-stake structure marks a departure from the grant-only approach used in earlier CHIPS Act awards and gives the federal government a direct financial stake in a commercial chipmaker's technology roadmap.

"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. "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 award follows $1.5 billion in funding that 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 AI

The initiative is part of the Trump administration's broader push to expand domestic semiconductor supply chains and reduce reliance on overseas manufacturing. In January, the administration proposed a $150 million equity stake for next-generation semiconductor technology. 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 (TSMC) and Israel-based Tower Semiconductor. Other companies racing to commercialize the technology include Intel, Broadcom, and Marvell, which are developing co-packaged optics and optical I/O solutions aimed at the same AI data center bottleneck GF is targeting.

GF CEO Tim Breen emphasized that the transition to optical connectivity is already underway as AI workloads grow 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."

GlobalFoundries' official announcement is available on the company's website.