The U.S. Department of Commerce (DoC) has come to an agreement with Infinera to provide up to $93 million in direct funding through the CHIPS and Science Act.
Under the deal, the investment will support the construction of a new fab in San Jose, California, and a new advanced test and packaging facility in Bethlehem, Pennsylvania. The projects would increase domestic manufacturing capacity by about 10-fold and create about 500 manufacturing jobs and 1,200 construction jobs.
When combined with investment tax credits through the CHIPS Act, the total direct funding could reach $200 million in federal incentives, Infinera said.
Infinera has operated its fabrication and test and packaging facilities in the U.S. for 20 years for semiconductor and telecommunications equipment. The company’s indium phosphide-based photonic integrated circuits (InP PICs) are becoming increasingly used in optical network communications due to the fast and reliable transfer of large amounts of data in communications. These include:
- Long distance broadband networks
- AI and machine learning clusters in data centers
- Data center communications
The projects that will benefit from the expansion of Infinera’s facilities include the U.S. Department of Defense, U.S. intelligence community, law enforcement and national security agencies that need secure communications and emerging technologies like quantum technology, sensing and lidar.
Why it matters
The whole premise of the CHIPS Act is to increase domestic semiconductor manufacturing, R&D and related technologies like advanced packaging and testing facilities.
Infinera is the 19th company to receive funding from the CHIPS Act after just this week Wolfspeed received funding to expand its SiC manufacturing. These chips will be used in emerging technologies like renewable energy and electric vehicles.
The goal is to increase domestic chip manufacturing to take the pressure off the supply chain if pandemics or geopolitical events occur that cause another semiconductor shortage. The idea is if regional chip manufacturing is spread out globally — instead of being aggregated in Korea, Taiwan and China — the supply chain will be more resilient and won’t fall into chaos like when lockdowns happened during COVID-19.
Other companies that have received funding include:
- BAE Systems — $35 million
- Absolics — $75 million
- Micron Technology — $6.14 billion
- Rocket Labs — $23.9 million
- GlobalFoundries — $1.5 billion
- Polar Semiconductor — $120 million
- Intel Corp. — $8.5 billion
- TSMC — $6.6 billion
- Samsung — $6.4 billion
- Microchip — $162 million
- GlobalWafers — $400 million
- Rogue Valley Microdevices — $6.7 million
- Entegris — $75 million
