GlobalFoundries is seeing strong demand tied to Chinese-made optical modules as data center construction accelerates, and that demand is part of the reason for its large investment in silicon photonics, The Next Web reported Sunday, citing an interview in the South China Morning Post. The comments highlight how a U.S. chipmaker is leaning into a supply chain that Washington regulators are moving to restrict.

What Happened

Shankaran Janardhanan, senior vice president of GlobalFoundries’ photonics and radio frequency division, told the SCMP that demand in the optical networking module segment was strong. He said that demand helps explain the company’s bet on photonics, chips that use light rather than electrical signals to move data.

According to the SCMP, Chinese optical module makers are shipping heavily to U.S. hyperscalers as data center links move from 100 to 200 gigabits per second per lane. That transition is creating an opening for GlobalFoundries to supply Chinese module producers with photonic chips.

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GlobalFoundries acquired Singapore-based Advanced Micro Foundry in November 2025 and now describes itself as the largest pure-play silicon photonics foundry. It is also deepening manufacturing ties in China: in 2025 it partnered with a Chinese foundry to produce automotive-grade chips for customers that require local production.

Why It Matters

Optical interconnects have become a constraint on how large AI clusters can grow, because moving data between thousands of accelerators at higher speeds pushes copper links to their limits. The SCMP noted that Microsoft, Amazon and Meta Platforms, along with Alibaba Group and Tencent, are all expanding optical connectivity to scale their AI data centers.

China dominates the supply side. Counterpoint Research estimates that Chinese companies make nearly two-thirds of the world’s optical transceivers, the modules that convert electrical signals into light at each end of a fiber link. For a foundry that makes the photonic chips inside those modules, Chinese assemblers are therefore among the largest potential customers.

The Regulatory Risk

That customer base sits in the path of U.S. policy. The Federal Communications Commission is drafting restrictions on Chinese optical components, according to The Next Web. Counterpoint has warned that such limits could raise costs for U.S. cloud providers such as Amazon and Microsoft, which buy large volumes of the modules for their data centers.

GlobalFoundries, which is headquartered in the U.S., is thus exposed on both sides: its photonics growth depends partly on Chinese module makers winning U.S. hyperscaler orders, while U.S. regulators are weighing rules that could shrink those orders. Neither report said how FCC action would affect the company’s photonics plans.

What to Watch

The scope and timing of the FCC’s draft restrictions are the main variable, including whether they target finished modules, the components inside them, or both. Also worth tracking is whether GlobalFoundries expands its China presence beyond the automotive partnership, and whether U.S. hyperscalers shift orders toward non-Chinese module suppliers as the move to 200-gigabit lanes continues.