GlobalFoundries sees ‘strong’ demand for Chinese optical modules amid data centre boom

US chipmaker GlobalFoundries anticipates strong demand for Chinese optical modules amidst the expanding data centre construction industry. In an interview with the South China Morning Post, Shankaran Janardhanan, senior vice-president of the firm's photonics and radio frequency division, confirmed that demand in the optical networking module segment is "strong". This surge has prompted the company to focus heavily on photonics, as highlighted at the company's recent annual tech summit in Shanghai.

Chinese optical module manufacturers are currently shipping extensively to US hyperscalers, as data standards rapidly transition from 100 to 200 gigabits per second per lane. This development presents new opportunities for GlobalFoundries, a company specializing in specialty semiconductors for data centres, cars, and other systems, to establish a niche in serving Chinese optical module producers.

Major players such as Microsoft, Amazon, Meta Platforms, Alibaba Group Holding, and Tencent Holdings are all advancing optical connectivity to scale their AI data centres. NVIDIA, an AI chipmaker, is also developing the ecosystem by integrating silicon photonics into its architectures to overcome traditional electrical bandwidth limitations.

The industry is debating the dominant data centre standard: pluggable modules, near-packaged optics (NPO), or co-packaged optics (CPO). However, the main challenge lies in manufacturing and testing optics at scale. GlobalFoundries has launched solutions in silicon photonics and advanced packaging to tackle this bottleneck. One key product is its silicon photonics co-packaged advanced light engine, or "Scale," designed for mass production of complex components and supporting advanced optical connectivity rollout.

GlobalFoundries has been operating in China for 12 years and has deep connections in the country's automotive industry. The company is expanding its Chinese manufacturing footprint to better serve its domestic clients. Recently, GlobalFoundries opened a new office in Guangzhou to strengthen a manufacturing partnership with local foundry Zen Semi, focusing on 40-nanometre automotive chips.

This partnership aims to transfer technological knowledge and build manufacturing capability locally for the domestic auto market. Janardhanan emphasized that while regionalization is crucial, it must be balanced with global supply chain resilience.