Chip firm GlobalFoundries (GF) has signed a letter of intent (LOI) with the US Department of Commerce, with the expectation that the chipmaker will receive $300 million to support research and development into next-generation silicon photonics.

The agreement has also seen the US government take a one percent stake in the company, effective today (July 29).

In a statement, GF said the funding would help accelerate silicon photonics development across wafer technologies, novel optical materials, and advanced packaging – including proven 3D hybrid bonding – enabling the company to deploy near-packaged optics (NPO) and co-packaged optics (CPO).

Unlike pluggable optics, where the transceivers are kept separate from the main chips, CPO integrates optical and electrical components, such as optical engines and switching ASICs, on a single packaged substrate.

Near-packaged optics, meanwhile, is an approach that sees the optical engine sit on the host board very close to the processor, whilst still maintaining its own separate, independent packaging. While highly efficient, it still loses a small amount of power due to the need for a short copper trace on the printed circuit board. NPO is often viewed as a three-quarter step on the way to co-packaged optics.

GlobalFoundries said future R&D efforts will directly build on its recently introduced SCALE (Silicon Photonics Co-Packaged Advanced Light Engine) platform, which offers 400Gbps performance and a “5x increase in energy efficiency over current-generation implementations.” The work will also leverage GF’s existing capabilities at its facilities in Malta, New York, and Burlington, Vermont, to “accelerate a US-based path to high-volume silicon photonics manufacturing.”

The chipmaker further noted that it is working with “leading customers” to ensure its NPO and CPO architectures and optical engines are “supported by US-based silicon photonics R&D.” Named customers include AMD, Broadcom, Cisco, Corning, Lumentum, Marvell, Meta, Microsoft, Nvidia, and Qualcomm.

“As we accelerate development of next-generation optical materials and co-packaged optics, GF is building on our already qualified portfolio of photonic devices, proven 3D hybrid bonding and advanced packaging expertise, combined with our manufacturing scale to bring near-packaged and co-packaged optics to high volume — putting our customers on a direct, US-based path to scaling optical connectivity for tomorrow’s AI systems,” said Gregg Bartlett, chief technology officer of GlobalFoundries.

“The CHIPS R&D incentives will support a breakthrough in compute and communication networks moving past traditional copper bottlenecking to power next-generation AI,” said Bill Frauenhofer, the executive director for semiconductor innovation and investment at the Department of Commerce. “Accelerating R&D for domestic photonics capabilities and advanced packaging provides American industry the extreme bandwidth and energy efficiency to scale complex AI workloads securely and rapidly.”

DCD took a closer look at co-packaged optics in the latest issue of the DCD>Magazine. You can read that story here.