GlobalFoundries Signs $300 Million Silicon Photonics Deal With U.S.

GlobalFoundries Inc. signed a letter of intent with the U.S. Department of Commerce on July 29, 2026, to receive a $300 million award from the CHIPS Research and Development Office. The funding aims to accelerate the development of next-generation silicon photonics, including optical materials, wafer technologies, and advanced packaging like co-packaged and near-packaged optics. These technologies replace traditional copper bottlenecking with light-based data transmission to increase bandwidth and energy efficiency for AI and high-performance computing data centers.

As part of the agreement, the U.S. Department of Commerce will receive equity representing approximately 1 percent ownership of the company. The initiative leverages the company's SCALE platform and existing manufacturing facilities in Malta, New York, and Burlington, Vermont. This effort aligns with a Trump Administration strategy to strengthen domestic semiconductor capabilities and compete with China.

Following the announcement, GlobalFoundries shares declined approximately 3 percent to roughly $48. Secretary of Commerce Howard Lutnick characterized the investment as a way to enhance domestic capabilities and keep the U.S. at the forefront of the semiconductor industry. CEO Tim Breen stated that silicon photonics is essential to AI infrastructure, noting that the industry is now shifting from copper to optical transmission to handle more complex workloads.