GlobalFoundries to receive $300M in federal funding for silicon photonics research

UPDATED 17:00 EDT / JULY 29 2026 INFRA GlobalFoundries to receive $300M in federal funding for silicon photonics research by Maria Deutscher The U.S. government will provide GlobalFoundries with $300 million in funding to support its silicon photonics research. The U.S. Commerce Department committed to providing the capital in a letter of intent that was announced today. As part of the transaction, the government will take a 1% stake in GlobalFoundries. The development comes two months after the chipmaker secured a separate $375 million federal grant for a new quantum chip foundry. GlobalFoundries operates fabs that produce chips based on customer-provided designs. One of the company’s specialties is making low-power processors that don’t require the latest manufacturing technologies. Additionally, GlobalFoundries produces auxiliary chips optimized for tasks filtering Wi-Fi inference. Silicon photonics, the focus of the company’s agreement with the Commerce Department, is an umbrella term for the chips that power fiber-optic networks. Such networks power many of the world’s artificial intelligence data centers. GlobalFoundries will use the federal funding to accelerate its silicon photonics research and development efforts. The initiative will place particular emphasis on a technology known as co-packaged optics, or CPO. Server switches represent the data traffic they process as electrical signals. They use a device called a pluggable transceiver to turn the electrical signals into light beams that can be transmitted over an optical network. Once the light arrives at its destination, another pluggable transceiver turns it back into electrical signals. The path through which traffic travels from a switch to the attached transceiver involves multiple pit stops. First, the traffic must move from the switch’s processor to its substrate, a kind of stand on which the processor sits. The traffic is then routed to the switch’s motherboard, which in turn forwards it to a network port. That port is the point where traffic leaves the switch and starts making its way to a pluggable transceiver. Moving traffic through multiple hardware components consumes a significant amount of power. Additionally, it often leads to traffic errors. That makes it necessary to include error correction chips in pluggable transcribers, which increases the cost of building optical networks. The CPO technology that GlobalFoundries is developing addresses those challenges. It integrates a transceiver directly into switch processors, which removes the need for traffic to travel through multiple intermediate components. The result is a significant reduction in both power consumption and hardware costs. In May, GlobalFoundries debuted a CPO manufacturing technology called SCALE. The company also makes other transceiver components including photodiodes, which generate the light that optical networks use to move data, and modulators. The latter components encode information into light beams by changing their physical properties. GlobalFoundries will use the federal funding to develop new optical materials, photonic wafer technologies and advanced packaging. The company’s efforts in the latter field will prioritize 3D hybrid bonding. That’s a manufacturing method used to stack silicon dies atop one another. “Silicon photonics is essential to AI infrastructure,” said GlobalFoundries Chief Executive Officer Tim Breen. “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 plans to develop silico