US Government to Invest $300 Million in GlobalFoundries to Advance Silicon Photonics Technology

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Simultaneously, Intel concludes its RAMP-C defense test chip initiative

The United States government has entered into a letter of intent to provide GlobalFoundries with $300 million in funding via the CHIPS Act. In exchange, the government will receive a one percent equity stake in the company, valued at approximately $269 million. Rather than a simple transactional exchange, this investment is strategically aimed at accelerating the development of silicon photonics networking technologies, which are becoming essential for high-performance AI data centers.

“Through these compute supply chain investments, the administration is accelerating America’s innovation engine,” stated Commerce Secretary Howard Lutnick. “These strategic investments will strengthen our domestic capabilities, generate high-paying jobs, and ensure the United States remains at the forefront of the semiconductor industry.”

GlobalFoundries is currently advancing its Silicon Photonics Co-Packaged Advanced Light Engine (SCALE) technology. This innovation aims to support 400 Gb/s per lane connectivity, a threshold where traditional copper interconnects face significant performance limitations in large-scale systems.

Both Co-Packaged Optics (CPO)—where optical engines are integrated directly into the compute logic—and Near-packaged Optics (NPO)—where optics reside in a module adjacent to the compute—are projected to see significant market growth over the next few years. During Computex in Taipei last month, Nvidia CEO Jensen Huang noted that these technologies are positioned to drive massive valuation growth for industry leaders like Marvell Technology.

The demand for these technologies is driven by the rapid scaling of AI hardware. In recent years, system architectures from companies like Nvidia and AMD have evolved from eight GPUs per chassis to massive rack-scale systems containing dozens of accelerators. To meet rising AI demands, chip designers are increasingly looking toward optical interconnects to facilitate even larger row-scale systems.

Since its spinoff from AMD, GlobalFoundries has pivoted away from leading-edge CMOS technologies to specialize in niche processes. As a result, the company has emerged as a premier manufacturer of the silicon photonics required by modern AI data centers.

GlobalFoundries indicated that the CHIPS Act funding will also drive innovation in novel optical materials and advanced packaging techniques, such as 3D hybrid bonding. These advancements are critical for the deployment of both NPO and CPO technologies manufactured domestically.

Through this arrangement, the American public will hold a direct interest in the success of the technologies manufactured by GlobalFoundries.

GlobalFoundries is not the first manufacturer to receive equity as a condition of CHIPS Act funding. Last summer, the Department of Commerce converted $5.7 billion in previously awarded CHIPS Act grants, along with $3.2 billion from the Secure Enclave program, into an approximately 10 percent stake in a different semiconductor manufacturer.

Industry Update:

On Tuesday, Intel announced the conclusion of the Rapid Assured Microelectronics Prototypes – Commercial (RAMP-C) program.

This Department of Defense (DoD)-sponsored initiative provided incentives for industry partners to develop test chips using Intel’s 18A process technology.

The conclusion of RAMP-C coincides with Intel’s transition toward the Secure Enclave program, which is dedicated to manufacturing semiconductors specifically for the US defense industrial base (DIB).

“Early access to Intel 18A has enabled DIB customers to utilize the Secure Enclave while satisfying critical size, weight, and power requirements,” the company stated.

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