Infinera and the U.S. Department of Commerce have signed a preliminary memorandum of terms (PMT) to secure up to $93 million in proposed funding under the CHIPS and Science Act. This potential funding, along with investment tax credits, could bring over $200 million in federal incentives. The funds would support the expansion of Infinera’s semiconductor manufacturing capabilities in Silicon Valley and advanced test and packaging operations in Pennsylvania. The planned projects aim to increase Infinera’s domestic manufacturing capacity by a factor of ten, while creating up to 1,700 jobs across both locations.
The projects are designed to boost U.S. semiconductor production and improve national security by reducing reliance on foreign suppliers. Infinera’s California facility will focus on expanding production of indium phosphide-based photonic integrated circuits (InP PICs), a critical technology for high-speed optical communication. In Pennsylvania, a new advanced test and packaging facility will help meet the growing demand for InP PICs, supporting both commercial AI applications and government defense contracts.
The proposed CHIPS funding, supported by bipartisan legislation, marks a significant investment in U.S. infrastructure and technology. Infinera’s CEO David Heard emphasized the importance of securing the supply chain for advanced communications: “The proposed CHIPS funding will enable us to better secure our supply chain and compete more effectively with foreign adversary nations.”
• $93 million in proposed funding under the CHIPS Act
• Potential for $200 million in total federal incentives
• Expansion of semiconductor manufacturing in California and Pennsylvania
• San Jose, California: Infinera plans to construct a new, modernized semiconductor fab with over 40,000 square feet (3,716 square meters) of cleanroom space, increasing its indium phosphide-based photonic integrated circuit (InP PIC) manufacturing capacity by a factor of 10 to meet growing demand.
• Bethlehem, Pennsylvania: Infinera will build an advanced test and packaging facility dedicated to InP PICs, helping secure the domestic and global packaging supply chain while supporting defense, commercial, and AI sectors. The facility will also focus on R&D for optical packaging technologies like 2.5D and 3D packaging.
• 1,700 jobs projected across both locations
“From artificial intelligence to electric vehicles to telecommunications infrastructure, 21st century technologies all rely on optical semiconductors like the ones manufactured by Infinera,” said U.S. Secretary of Commerce Gina Raimondo. “The Biden-Harris Administration is taking meaningful steps towards achieving the economic and national security goals of the CHIPS and Science Act with proposed investments like this one, which will help us secure semiconductor manufacturing projects and create high-tech jobs across the country.”
“We are grateful for the bipartisan efforts under the CHIPS and Science Act to increase semiconductor fabrication and packaging in the U.S. and protect our national and economic security,” said David Heard, Infinera CEO. “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.”
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