SiGe Capacity Expansion Accelerates as AI Data Centres Shift to Optical Networking

GlobalFoundries

SiGe capacity is becoming a critical bottleneck as artificial intelligence data centres move from copper interconnects toward optical networking. GlobalFoundries is expanding silicon germanium capacity to meet rising demand from customers building high-speed optical connectivity systems.

SiGe capacity at GlobalFoundries’ Vermont fabrication plant is already oversubscribed into 2027. The company said demand has reached an inflection point as AI workloads drive higher bandwidth, power efficiency and data transmission requirements.

SiGe capacity matters because silicon germanium technology supports key components in optical transceivers. These devices allow data centres to move information faster, cleaner and with less energy loss across large computing clusters.

The expansion reflects a wider shift in semiconductor materials. AI infrastructure is no longer only a story about graphics processors and advanced logic chips. It increasingly depends on photonics, optical transceivers and specialty semiconductor materials such as germanium.

Optical Networking Pushes SiGe Into a Strategic Role

AI data centres are increasing compute density and power consumption, forcing operators to rethink how data moves across networks. Copper interconnects face limits in reach, bandwidth density and energy efficiency.

Optical networking addresses those limits. It enables higher-speed data transfer across longer distances while improving system efficiency.

This shift is lifting demand for silicon photonics and SiGe technology. These materials are used in pluggable optical transceivers that convert high-speed electrical signals into optical signals and back again.

GlobalFoundries said SiGe is used in limiting amplifiers, transimpedance amplifiers and laser drivers. These components support signal amplification, conversion and cleaner data transmission inside data centre networks.

Transimpedance amplifiers and drivers are required in most data centre connections. As optical networking deployments grow, unit demand for these components is expected to increase sharply.

Satellite communications are also increasing SiGe usage. However, AI data centre optical networking is now the main growth signal attracting market attention.

Customer Prepayments and Government Support Shape Expansion

GlobalFoundries expects to double silicon photonics revenue in 2026. The company is targeting a silicon photonics revenue run rate above $1bn by the end of 2028 and $2bn in 2030.

GF already operates 300mm and 200mm silicon photonics and SiGe manufacturing facilities in New York and Singapore, with additional capacity in Germany. It also has a major US footprint in Vermont and New York.

The company increased annual wafer capacity to 2.7mn 300mm wafer equivalents in 2025 from 2.2mn in 2020. It also has an installed base of 1.6mn 200mm wafers per year.

GlobalFoundries has previously announced plans to invest more than $12bn in its New York and Vermont sites over the next decade. But future capacity growth will be tied closely to customer demand, prepayments and government financing.

That model is important. Semiconductor capacity expansion is capital-intensive, and customers increasingly need to help secure the supply chains they depend on.

Government grants and tax incentives are also becoming essential. AI, photonics, semiconductors and critical materials are now treated as strategic infrastructure, not only commercial technology.

For materials markets, the signal is clear. Germanium demand could gain support from AI-driven optical networking, especially as silicon photonics and SiGe devices become more important to data centre performance.

The Metalnomist Commentary

GlobalFoundries’ SiGe expansion shows that AI supply chains are moving deeper into specialty semiconductor materials. The next bottleneck may not be compute chips alone, but the optical and germanium-linked technologies needed to connect them efficiently.

 

GlobalFoundries Partners with Finwave to Advance GaN-on-Si Technology for Mobile Devices

Cutting-edge collaboration aims for mass production by 2026

US-based Finwave Semiconductor has secured a deal with GlobalFoundries (GF) to scale its gallium nitride (GaN)-on-silicon (Si) technology for mobile phone power amplifiers. The partnership targets large-scale manufacturing of Finwave’s high-electron mobility transistors (MISHEMTs) at GF's 200mm facility in Burlington, Vermont, with an eye on mass production by early 2026. This collaboration merges Finwave's advanced GaN-on-Si tech with GF’s US-based manufacturing and RF silicon platforms.

GaN-based MISHEMTs outperform CMOS and gallium arsenide (GaAs) devices in power output and energy efficiency, making them ideal for 5G and future 6G applications. The technology promises significant improvements in power density and efficiency for power amplifiers, essential for new high-frequency 5G bands, 6G, and Wi-Fi 7 systems.

GF is also advancing its own 650V GaN products and will soon introduce 100-200V variants. The company plans to modernize its Burlington facility and expand capacity, aided by a US Chips and Science Act grant aimed at boosting domestic semiconductor production. GF's recent acquisition of Tagore Technology’s power GaN IP portfolio underlines its commitment to high-volume manufacturing of power technologies in the US.

Anticipating a rebound in smart mobile device sales in 2024, GF’s CEO Thomas Caulfield highlighted AI-enabled devices as a catalyst for increased demand in efficient power semiconductors, starting in Q4 2024.

Chinese EV LiDAR Chip Demand Surges on ADAS Race

EV LiDAR

Chinese EV LiDAR chip demand is accelerating as ADAS becomes a mainstream differentiator in China. Chinese EV LiDAR chip demand expanded with EVs exceeding half of new sales in 1H25. Therefore, Chinese EV LiDAR chip demand will keep rising as LiDAR extends beyond premium models. LiDAR, radar, and cameras now scale across mid-range vehicles. Premium 1,550nm systems lift semiconductor intensity per car. Meanwhile, 905nm GaAs units remain cost leaders for mass ADAS.

Materials Impact: Gallium, Indium, Germanium and InP

LiDAR growth raises near-term gallium needs through 905nm GaAs emitters. However, 1,550nm adoption pulls indium and phosphide demand via InGaAs and InP lasers. Germanium also gains in SiGe receivers and select SWIR optics. Silver telluride could appear in photodetectors, from a low base. As a result, upstream pricing power may shift to high-purity minor metals and epitaxial wafers. Apparent adoption reached 17% of Chinese EVs by June. Unit growth will compound material consumption through 2026.

Supply Chain and Capacity Ramp Inside China

RoboSense surpassed one million automotive LiDAR units by June. Hesai installed new lines and targets two million units a year by end-2025. The firm won designs on 20 models for 2026 launches. BYD will deploy God’s Eye ADAS across all new models. Two variants include LiDAR for wider feature access. Pony AI’s seventh-generation Robotaxi uses four Hesai AT128 sensors per car. Each unit integrates 128 VCSELs, using InP, GaAs, or GaN. GlobalFoundries reports 36% automotive growth and pursues “China for China.” That strategy supports local ADAS, laser drivers, and radar SoCs.

The Metalnomist Commentary

LiDAR’s shift from flagship to mainstream rewrites the automotive semiconductor bill. Watch 1,550nm penetration; it will set the slope for InP and InGaAs demand. Export permits and wafer capacity could become the hidden bottlenecks in 2026.

US Expands Semiconductor Investments with India Partnership

India Chip

The US government continues to ramp up investments in semiconductor manufacturing both domestically and internationally, with a significant focus on partnerships with allied nations. This week, a major agreement was reached between the US and Indian governments to establish a new semiconductor plant in Kolkata, India. The facility will focus on producing advanced semiconductors, including infrared, gallium nitride (GaN), and silicon carbide (SiC), to support sectors such as national security, next-gen telecommunications, and clean energy.

Strengthening Tech Ties: US-India Collaborations

This venture is a part of a broader collaboration supported by the US Space Force, Bharat Semi, 3rdiTech, and the India Semiconductor Mission. The mission, initiated by India's electronics and IT ministry (MIIT), aims to build a robust semiconductor supply chain, supported by the US Department of Commerce’s International Technology Security and Innovation (ITSI) Fund. The fund itself is a key initiative under the CHIPS and Science Act, designed to bolster US semiconductor production.

In addition to the plant in Kolkata, US-based Analog Devices has also signed a partnership with India's Tata Electronics. Their collaboration focuses on chip production at Tata's planned $11bn manufacturing plant in Gujarat, with a potential $3bn facility for chip assembly and testing in Assam. Furthermore, US manufacturer GlobalFoundries, after acquiring Tagore Technology’s power GaN IP, announced plans to develop a Kolkata Power Centre for GaN technology.

On the domestic front, the US Commerce Department recently awarded Polar Semiconductor up to $123mn to expand its silicon wafer manufacturing in Bloomington, Minnesota. This marks the first allocation under the CHIPS Act for commercial chip production, which has sparked over $400bn in private semiconductor investments and more than $35bn across 16 states.