The Department of Commerce has provisionally agreed to provide up to $93 million in direct funding to optical networking vendor Infinera.
The proposed funding, awarded under the CHIPS and Science Act, would support the construction of a new fab in San Jose, California, and a new advanced test and packaging facility in Bethlehem, Pennsylvania.
In a statement, the Department of Commerce said the projects would increase Infinera’s existing domestic manufacturing capacity by an estimated factor of 10 and would create up to approximately 500 manufacturing jobs and 1,200 construction jobs across the two states.
Infinera manufactures indium phosphide-based photonic integrated circuits (InP PICs) that use light to efficiently transfer information across broadband networks, between AI and machine-learning clusters inside the data center, and between data centers themselves.
Both the San Jose and Bethlehem facilities will manufacture the company’s InP PICs. The site in Pennsylvania would be one of the only advanced test and packaging facilities dedicated to packaging InP PICs in the United States and will also include dedicated R&D space focused on newer optical packaging technologies, such as 2.5D and 3D packaging and co-packaged optics.
“We are grateful for the bipartisan efforts under the CHIPS and Science Act to increase semiconductor fabrication and packaging in the US and protect our national and economic security,” said Infinera CEO David Heard. “The proposed CHIPS funding will enable us to better secure our supply chain and compete more effectively with foreign adversary nations. Our unique photonic semiconductors address the increased demand for bandwidth from consumers while opening new markets inside the data center driven by the explosive growth in AI workloads.”
In order to secure the funding, Infinera has signed a project labor agreement (PLA) with the North Carolina Carpenters Union and agreed to fill all roles with 100 percent labor union-signatory contractors affiliated with the building trades. A similar arrangement has been made with Lehigh Valley Building Trades in Pennsylvania.
The company has also partnered with the SEMI Foundation to recruit, train, and develop facility workforces and will be extending its Registered Apprenticeship program in California and Pennsylvania to help economically disadvantaged people gain experience and training opportunities within the semiconductor industry.
The Department of Commerce further noted that Infinera will offer a Dependent Care Flexible Spending Account, allowing employees to set aside up to $5k a year of pre-tax money to use on qualified dependent care expenses. The company has also implemented a parental leave benefit for mothers and now offers a childcare assistance program via the State Equal Representation in Construction Apprenticeship (ERiCA) Grant, which aims to support women, non-binary, and underserved communities interested in taking up a career in the building and construction industry.
The announcement marks the second CHIPS and Science Act funding allocation made by the Department of Commerce this week. On October 16, silicon carbide chip company Wolfspeed signed a provisional agreement with the department to receive up to $750 million in direct funding to support the construction of two new facilities in North Carolina and New York.
The $280bn CHIPS and Science Act, was approved by Congress in July 2022, with $52bn of the overall funding package designated as subsidies for US semiconductor manufacturers. Funding from the act has also been earmarked for semiconductor R&D, growing a skilled semiconductor workforce, and incentives for the manufacturing of chips and specialized tooling equipment.
To date, the Department of Commerce has awarded more than $32bn in proposed CHIPS Act funding to companies across 16 states, including GlobalFoundries, TSMC, Samsung Electronics, Micron, SK Hynix, and GlobalWafers.
