Infinera and the U.S. Department of Commerce signed a non-binding preliminary memorandum of terms for Infinera to receive up to $93 million in direct funding as part of the bipartisan CHIPS and Science Act.
This proposed direct funding, when combined with investment tax credits available under the CHIPS and Science Act, could result in more than $200 million in total federal incentives as well as potential state and local incentives.
David Heard, CEO of Infinera, said, “The proposed CHIPS funding will enable us to secure our supply chain better and compete more effectively with foreign adversary nations.”
Ramping production, job creation
A key funding target is enabling Infinera to ramp up its production capabilities.
Specifically, the proposed funding would support the expansion and modernization of Infinera’s semiconductor capabilities in Silicon Valley, California, and its advanced test and packaging capabilities in Lehigh Valley, Pennsylvania.
Each of these facilities will address the company’s production needs to accommodate current and future technological developments:
- San Jose, California: Infinera will build a new, modernized fab and foundry with over 40,000 square feet of cleanroom space to increase its InP PIC manufacturing to meet future capacity and capability demands. With this construction, Infinera is estimated to increase its production capacity by a factor of 10.
- Bethlehem, Pennsylvania: It will construct a new advanced test and packaging facility to meet the increasing demand for InP PICs. As one of the only advanced test and packaging facilities dedicated to packaging InP PICs in the United States, this project would also help bolster the domestic and global packaging supply chains while keeping a domestic packaging base for Infinera’s defense and intelligence customers and the commercial and AI sectors. Additionally, this facility would include dedicated R&D space focused on newer optical packaging technologies, such as 2.5D and 3D packaging and co-packaged optics.
The projects would allow Infinera to increase the domestic fabrication, advanced test, and packaging of InP PICs for secure communications and emerging technologies such as quantum technology, sensing, and LiDAR for the Department of Defense, Intelligence Community, law enforcement, and national security agencies.
Another benefit of the funding is job creation. The combined proposed financing of these two projects could create up to 1,700 manufacturing and construction jobs while strengthening America’s supply chain, economy, and national security.
“Today’s announcement demonstrates how CHIPS directly supports critical sectors like artificial intelligence and telecommunications while creating jobs and economic opportunity in Bethlehem, PA and San Jose, CA,” said Natalie Quillian, White House Deputy Chief of Staff.
Addressing energy concerns
As energy usage requirements continue to rise, Infinera’s indium phosphide-based photonic integrated circuits (InP PICs) will play an even more important role. They allow the transfer of information with greater energy efficiency.
These components enable the fast and reliable transfer of large amounts of data in communications, spanning short- to long-distance broadband networks, between AI and machine-learning clusters inside the data center, and between data centers.
The stakes for energy efficiency become even higher as data center providers quickly become among the largest electricity consumers.
According to a recent International Energy Agency (IEA) report, data centers’ total electricity consumption could reach more than 1,000 TWh in 2026.
In 2022, 460TWh was consumed by data centers, representing two percent of all global electricity usage. Within the data center segment, IEC wrote that computing power and cooling were the two most energy-intensive processes within data centers. Additionally, the rapid growth of artificial intelligence-related services over the last 12 months means providers have invested in power-hungry GPUs.
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Sean Buckley
Sean is responsible for establishing and executing the editorial strategies of Lightwave and Broadband Technology Report across their websites, email newsletters, events, and other information products.