The U.S. government is awarding GlobalFoundries $300 million to advance the development of silicon photonics and co-packaged optics technology. This funding aims to enhance data transfer speeds and energy efficiency within AI and large-scale video processing data centers.
Silicon photonics is critical for solving the I/O bottlenecks and energy costs inherent in large-scale AI and video processing. By moving data with light instead of electricity, these components reduce latency and power consumption at a time when hyperscale workloads are stressing infrastructure. GlobalFoundries' SCALE platform could allow the company to offer end-to-end domestic fabrication and optical packaging, a capability currently dominated by Asian manufacturers. For streaming platforms, this hardware evolution is necessary to maintain the margins of computationally intensive applications like real-time cloud gaming and AI-driven content personalization. Watch for the finalization of the award and specific progress reports on the Malta facility expansion.
The $300 million award is part of a broader expansion strategy at GlobalFoundries. In June 2025, the company announced a $16 billion plan to reshore semiconductor production to the U.S., supported by major partners including Apple, NVIDIA, and Microsoft. This initiative built upon a $1.5 billion direct funding award from the CHIPS and Science Act in 2024, which enabled the construction of a new state-of-the-art fab in Malta, New York. To complement its manufacturing growth, GlobalFoundries also launched a dedicated Advanced Packaging and Photonics Center in January 2025 with $75 million in federal support, aimed at providing the first end-to-end domestic solution for silicon photonics packaging.
The investment coincides with a significant industry shift toward 800G and 1.6T data center deployments to meet AI-driven demand. Per research from Expert Market Research and Semi Taiwan (2026), the global silicon photonics market is projected to reach nearly $9 billion by 2030, growing at a CAGR of over 25%. While GlobalFoundries targets 400 Gbps performance, competitors like Marvell and NVIDIA began rolling out 1.6T optical platforms and co-packaged optics (CPO) InfiniBand switches in early 2026. The U.S. government’s decision to take a 1% equity stake in GlobalFoundries as part of this latest round further aligns national security interests with commercial semiconductor capacity, particularly as Washington seeks to insulate domestic AI supply chains from geopolitical tensions in the Asian technology corridor.
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