According to a recent press release from the U.S. Department of Commerce, the department has partnered with optical semiconductor company Infinera under the CHIPS Act, signing a non-binding memorandum of understanding to provide up to USD 93 million in funding.

This subsidy will support Infinera in building a new 3,700-square-meter wafer manufacturing facility in San Jose, California, which will increase the company’s production capacity of indium phosphide (InP) photonic integrated circuits (PICs) tenfold. Additionally, Infinera will establish a testing and advanced packaging center in Bethlehem, Pennsylvania, expanding production capabilities for 2.5D/3D packaging and co-packaged optics (CPO).

Infinera also plans to apply for an investment tax credit from the U.S. Department of the Treasury. The combined incentives from the federal government are expected to exceed USD 200 million.

Infinera is a vertically integrated U.S. semiconductor manufacturer with over 20 years of experience, specializing in producing photonic chips (PICs) using indium phosphide (InP) technology. Infinera’s photonic chips enable efficient data transmission for broadband networks, data centers, and AI-driven applications by integrating multiple optical functions onto a single chip. These circuits reduce power consumption and operational costs while optimizing network performance.

Industry reports from June 2023 revealed that Nokia announced plans to acquire Infinera for USD 2.3 billion, with the transaction expected to close in the first half of 2025. This acquisition will expand Nokia’s market access in North America and better support Infinera’s customers outside the region.

Highly Anticipated Photonic Chips

Currently, optical modules primarily follow two integration schemes: one based on indium phosphide (InP) and another on silicon photonics (SiPh). Additionally, a future technology, thin-film lithium niobate (TFLN), is on the horizon. Leading companies in this field include Infinera, Acacia, Inphi, Ciena, and Huawei. Acacia and Inphi are well-known silicon photonics integration chip manufacturers, while Infinera focuses on indium phosphide.

In the silicon photonics space, since 1985, the technology has undergone significant evolution. Initially, the focus was on developing high-confinement waveguide technology. Over time, silicon photonics has not only achieved strategic integration with the CMOS industry in terms of materials, integration, and packaging but has also established its dominance in the transceiver market.

On the other hand, the most prominent use of indium phosphide (InP) is in optoelectronics. InP lasers generate light for optical communication systems worldwide, ranging from fiber connections and networks to free-space optical communications.

After decades of development, researchers are now focused on building mature photonic integrated circuits on InP substrates. Applications have expanded from communication technologies to sensors and imaging systems in the automotive, medical, and other markets.

In the modern AI era, data centers have become the primary and most direct application scenario for both InP and silicon photonics integration schemes. Indium phosphide (InP) allows for monolithic integration of active components (lasers, amplifiers) but is limited by smaller wafer sizes. Silicon photonics, on the other hand, leverages the mature large-scale silicon wafer CMOS manufacturing process but requires heterogenous integration of active components.

Over the past decade, numerous PIC technologies for data center interconnects have been developed and commercialized, with transmission rates expanding from 40G to 800G.

(Photo credit: Infinera)