Uncle Sam sees the light, offers GlobalFoundries $300M to pursue silicon photonics while taking 1% stake

The US government has signed a letter of intent to provide GlobalFoundries with $300 million in CHIPS Act funding and, at the same time, receive a one percent stake in the company worth roughly $269 million. The money's supposedly not a tit-for-tat, but an investment designed to spur development of silicon photonics networking technologies that the AI industry needs for datacenters. “With today’s compute supply chain investments, the Trump Administration is accelerating America’s innovation engine,” Commerce Secretary Howard Lutnick said in a canned statement. “These strategic investments will enhance our country’s domestic capabilities, create high-paying jobs and keep America at the forefront of the semiconductor industry.” GlobalFoundries’ previously announced Silicon Photonics Co-Packaged Advanced Light Engine (SCALE) is one of the technologies it’s pushing in order to support 400 Gb/s per lane connectivity, which is about the speed at which copper interconnects become problematic for large scale systems. Both CPO, where optical engines are integrated directly into the compute logic, and NPO, where the optics reside in a module adjacent to the compute, are expected to be big business over the next couple of years. At Computex in Taipei last month, Nvidia CEO Jensen Huang quipped that these technologies would make Marvell Technology the next trillion dollar company. Over the past two years, system designs from Nvidia and AMD have grown from eight GPUs in a box to rack systems packing six dozen accelerators into a single machine. To meet growing AI demand, the chip designers are plotting even larger row-scale systems using optical interconnects. Since its spinoff from AMD, GlobalFoundries has moved away from leading-edge CMOS technologies in order to focus on more specialized processes. The company has become a leading producer of silicon photonics used in modern AI datacenters. In addition to next-gen silicon photonics tech, GlobalFoundries says the CHIPS Act funding will also support the development of novel optical materials, advanced packaging capabilities like 3D hybrid bonding, which will support the rollout of domestically manufactured near-packaged optics (NPO) and co-packaged optics (CPO). And thanks to the Trump administration, regular Americans will have a stake in the success of these technologies — or at least the ones GlobalFoundries ends up manufacturing. GlobalFoundries would not be the first American fab operator that Uncle Sam has secured equity from in exchange for CHIPS Act funding. Last summer, the Commerce Department converted $5.7 billion in previously awarded but not yet disbursed CHIPS Act grants, along with $3.2 billion awarded under the Secure Enclave program, into roughly a 10 percent stake in the struggling chipmaker. Bootnote: On Tuesday, Intel announced the Rapid Assured Microelectronics Prototypes - Commercial (RAMP-C) program had reached its conclusion. The Department of Defense (DoD)-sponsored program offered incentives to industry partners to develop test chips in Intel fabs on the company’s 18A process technology. The program’s end comes as Intel shifts its manufacturing might to a new government program called the Secure Enclave, which will manufacture semiconductors for use by US defense industrial base (DIB) customers. “Early access to Intel 18A has positioned DIB customers to leverage Secure Enclave while meeting critical size, weight and power requirements,” the company wrote. ®

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