Uncle Sam awards GlobalFoundries $300 million in CHIPS Act funding to pursue silicon photonics, taking a 1% strategic equity stake.

The US government has signed a letter of intent to provide GlobalFoundries with $300 million in CHIPS Act funding while receiving a one percent stake in the company worth roughly $269 million. The investment is designed to accelerate development of silicon photonics networking technologies essential for AI datacenters, according to Commerce Secretary Howard Lutnick, who said in a statement: "With today's compute supply chain investments, the Trump Administration is accelerating America's innovation engine. 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' Silicon Photonics Co-Packaged Advanced Light Engine (SCALE) is among the technologies the company is pushing to support 400 Gb/s per lane connectivity—roughly the threshold at which copper interconnects become problematic for large-scale systems. The industry is moving toward two complementary approaches: co-packaged optics (CPO), where optical engines integrate directly into compute logic, and near-packaged optics (NPO), where optics reside in an adjacent module. Both are expected to become major markets in coming years. At Computex last month, Nvidia CEO Jensen Huang suggested these technologies could make Marvell Technology the next trillion-dollar company.

System designs from Nvidia and AMD have scaled dramatically over the past two years, growing from eight GPUs per box to rack systems housing six dozen accelerators. To meet accelerating AI demand, chip designers are now plotting even larger row-scale systems using optical interconnects. Since spinning off from AMD, GlobalFoundries has shifted away from leading-edge CMOS to focus on specialized processes, becoming a leading producer of silicon photonics for modern AI datacenters.

Beyond next-generation silicon photonics, the CHIPS Act funding will support development of novel optical materials and advanced packaging capabilities, including 3D hybrid bonding to enable domestically manufactured NPO and CPO systems. The investment represents the second time the Trump administration has taken an equity stake in exchange for CHIPS Act funding—last summer, the Commerce Department converted $5.7 billion in previously awarded but undisbursed grants and $3.2 billion from the Secure Enclave program into roughly a 10 percent stake in Intel.

Separately, Intel announced on Tuesday that the Rapid Assured Microelectronics Prototypes - Commercial (RAMP-C) program has concluded. The Department of Defense–sponsored initiative offered incentives to industry partners to develop test chips in Intel fabs using the company's 18A process technology. The program's end coincides with Intel's shift toward a new government program called the Secure Enclave, which manufactures semiconductors for US defense industrial base customers. "Early access to Intel 18A has positioned DIB customers to leverage Secure Enclave while meeting critical size, weight and power requirements," Intel said.