GlobalFoundries said Wednesday it signed a letter of intent with the U.S. Department of Commerce for an expected $300 million CHIPS research award that would be paired with a separate agreement giving the federal government approximately 1 percent of the chipmaker. The transaction would exchange research funding for an ownership position in the publicly traded company. Commerce said the project would speed domestic work on optical connections for AI processors and high-performance computing.

The equity provision extends beyond GlobalFoundries. As a funding condition, Commerce would take minority, non-controlling stakes in all seven companies, the department announced. The Register valued GlobalFoundries' 1 percent stake at about $269 million and noted that Commerce last summer converted $5.7 billion of undisbursed CHIPS grants and $3.2 billion in Secure Enclave money into roughly 10 percent of Intel.

What Changed

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Copper limits and the SCALE program

Copper connections face growing limits as AI rack systems add more processors. Designs from Nvidia and AMD grew in two years from eight GPUs in a box to rack systems holding six dozen accelerators, The Register reported. Silicon photonics shifts data movement to light, while co-packaged optics shortens the electrical path between an optical engine and the processor.

The proposed award would fund next-generation silicon photonics wafers, novel optical materials and advanced packaging, including 3D hybrid bonding. GlobalFoundries said the work builds on its SCALE platform, with near-packaged optics placing optical components close to processors and co-packaged optics integrating them alongside compute logic. The company is targeting 400 gigabits per second per lane and up to five times the energy efficiency of current implementations.

Commerce estimates the award could accelerate domestic co-packaged-optics research by two to three years. GlobalFoundries plans to use facilities in Malta, New York, and Burlington, Vermont, which the company said would provide a path from research toward U.S. volume production. Commerce executive Bill Frauenhofer described the program as intended to provide the "extreme bandwidth and energy efficiency" required by complex AI workloads.

Awards across seven companies

The seven letters total $874 million. In addition to GlobalFoundries, Kepler could receive up to $245 million for memory technology and Multibeam up to $140 million for packaging work. Extropic could receive up to $75 million, Thintronics up to $50 million, OBSIDIA up to $34 million and Aeluma up to $30 million.

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Overseas supply and market response

Reuters reported that much of the silicon photonics and advanced optical packaging supply chain remains outside the United States, with TSMC in Taiwan and Tower Semiconductor in Israel. The report placed the proposal inside President Donald Trump's redirection of CHIPS research funds, following $150 million for semiconductor manufacturing equipment and $2 billion for quantum computing. Ten companies, including AMD, Broadcom, Cisco, Corning, Lumentum, Marvell, Meta, Microsoft, Nvidia and Qualcomm, issued statements supporting the GlobalFoundries plan.

GlobalFoundries shares surrendered earlier gains and traded about 3 percent lower at roughly $48 on Wednesday. The chipmaker, spun out of AMD in 2009, ranked fifth among global foundries with a 3.3 percent share in the first quarter, TrendForce data showed. GlobalFoundries had previously received $1.5 billion in direct CHIPS funding, $75 million for advanced packaging and $375 million for a quantum business, according to Sen. Chuck Schumer's office.

Final approval

The proposed funding has not been awarded; Commerce must complete further diligence and approval and reach definitive agreements, while its CHIPS R&D Office continues to solicit proposals.

Frequently Asked Questions

How much is GlobalFoundries actually receiving?

Nothing yet. The company signed a letter of intent for an expected $300 million CHIPS research award. Commerce said the letters remain subject to further diligence, approval and definitive agreements before any final award is made.

What does the government get in return?

A separate agreement would give the Commerce Department approximately 1 percent of GlobalFoundries. The Register valued that stake at about $269 million. Commerce is taking minority, non-controlling stakes in all seven companies in the package as a condition of the funding.

Why does silicon photonics matter for AI data centers?

Copper connections face growing limits as rack systems add processors. Designs from Nvidia and AMD grew in two years from eight GPUs in a box to racks holding six dozen accelerators. Silicon photonics moves data with light instead, and co-packaged optics shortens the electrical path between an optical engine and the processor.

Who else is in the $874 million package?

Six other companies. Kepler could receive up to $245 million for memory technology and Multibeam up to $140 million for packaging work. Extropic could receive up to $75 million, Thintronics up to $50 million, OBSIDIA up to $34 million and Aeluma up to $30 million.

Has GlobalFoundries received CHIPS money before?

Yes. According to Sen. Chuck Schumer's office, the company previously received $1.5 billion in direct CHIPS funding, $75 million for advanced packaging and $375 million for a quantum business.

AI-generated summary, reviewed by an editor. More on our AI guidelines.

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