UAE-backed GlobalFoundries wins $300 million US award to develop faster chips

UAE-backed semiconductor manufacturer GlobalFoundries has secured a $300 million award from the US government to accelerate development of chip technologies aimed at making AI data centres faster and more energy efficient. The funding, provided through the CHIPS Act research programme, follows a letter of intent signed between GlobalFoundries, headquartered in Malta, New York, and the US Department of Commerce on Wednesday.

“These strategic investments will enhance our country’s domestic capabilities, create high-paying jobs and keep America at the forefront of the semiconductor industry,” Commerce Secretary Howard Lutnick said.

The award is part of a broader push by the Trump administration to steer CHIPS Act research funding toward semiconductor technologies as Washington seeks to strengthen its competitive position with China. GlobalFoundries said the $300 million will accelerate its silicon photonics wafer technologies, novel optical materials and advanced packaging — areas that use light rather than electrical signals to transmit data between chips, improving performance and lowering power consumption.

Project aims and technical goals

• Boost data transfer speeds to 400 gigabits per second;
• Achieve a five-times increase in energy efficiency over current-generation implementations;
• Advance silicon photonics wafer processes, optical materials and advanced packaging methods.

In addition to the research award, the Commerce Department will take an equity position in GlobalFoundries representing roughly 1 per cent ownership based on the company’s share structure at the time of the agreement. The administration has previously committed other semiconductor-related funding, including $150 million for semiconductor manufacturing equipment and $2 billion targeted at quantum computing.

GlobalFoundries is majority-owned by Mubadala Investment Company, which holds approximately 73 per cent of the firm after a May transaction in which Mubadala sold 22 million shares. The company’s headquarters are in Malta, New York state, and it positions the new funding as a way to accelerate commercially viable silicon photonics solutions for hyperscale AI and data-centre customers.

Context and significance

Silicon photonics replaces electrical interconnects with optical links on and between chips, offering higher bandwidth and lower energy use — attributes critical to next-generation AI workloads that place intense demands on data movement. GlobalFoundries’ stated target of 400 gigabits per second and a five-fold energy-efficiency gain, if realised at scale, would represent a meaningful step forward for data-centre networking and server architecture.

Commerce Secretary Howard Lutnick framed the move as part of the administration’s strategy to bolster US semiconductor capabilities, saying: “With today’s compute supply chain investments, the Trump Administration is accelerating America’s innovation engine.” The combination of direct research funding and an equity stake signals a dual approach: spur technical progress while anchoring strategic industrial capacity domestically.

Outlook

Implementation will hinge on technical milestones and the commercialisation pathway for silicon photonics at scale. If GlobalFoundries meets its stated performance and efficiency targets, the developments could reduce operational costs for large-scale AI deployments and strengthen the US supply base for advanced interconnects. The agreement also underlines continuing government-industry collaboration under the CHIPS Act as policymakers and firms prioritise technologies seen as decisive in the strategic rivalry with China.