Demand for optical modules among Chinese data centers remains strong across all photonic architectures, according to manufacturing giant GlobalFoundries (GF).

Shankaran Janardhanan, SVP of the foundry’s photonics and radio frequency division, told the South China Morning Post (SCMP) that demand for optics from Chinese customers was among the drivers behind its significant bet on the emerging photonics space.

GlobalFoundries has been steadily growing its photonics capabilities of late with a series of acquisitions aimed at scaling production.

Egyptian optical transceiver chiplet designer InfiniLink was acquired in late November, just a couple of weeks after Singaporean silicon photonics manufacturer Advanced Micro Foundry (AMF) joined the chip manufacturing giant. Following the AMF deal’s unveiling, GF claimed its deals would make it the “largest silicon photonics pure-play foundry by revenue.”

Demand for optical technologies is set to skyrocket – a report from China Insights Consultancy projects a 23-fold surge in silicon photonic-specific revenue between 2024 and 2030.

To meet that demand, GlobalFoundries is expanding its Chinese manufacturing footprint while also adding $3 billion to its existing $13 billion pledge to build out manufacturing in the U.S.

Referencing the firm’s planned buildout in China, Janardhanan told SCMP: “We selected a market and technology that China needed, and we will continue to assess opportunities as the market evolves.”

China already leads the world in terms of pluggable development, supplying many U.S. hyperscalers with optical transceivers needed for AI data center networks. But despite spending “billions” on Chinese transceivers, according to analyst firm LightCounting, the U.S. is clamping down on several vendors. Zhongji Innolight, for example, has been a key optical module supplier for hyperscalers Google and Microsoft, but found itself added to the Pentagon’s list of alleged Chinese military-backed companies in June.

Add to that reports suggesting export controls extending to transceivers, and Chinese firms being challenged by a buildout of emerging U.S. players like Mesh Optical Technologies – now owned by Elon Musk.

“In the semiconductor industry, I don’t think there is any single region that is able to independently cover the entire value chain,” Janardhanan said.

Huawei is among China's AI infrastructure leaders racing to embrace optical technologies, with the vendor throwing its weight behind near-packaged optics (NPO), arguing it’s more viable in the near term and less supply-chain constrained than co-packaged optics (CPO), which Western rivals are increasingly backing. These include Marvell, which recently signed a multi-year agreement with GF to increase capacity for the latter's silicon germanium (SiGe) technology, a deal framed as supporting the development of next-generation pluggable optical transceivers alongside NPO and CPO.

“Whether it’s pluggables, NPO, or CPO, being able to manufacture and test optics at scale is the key challenge,” Janardhanan told SCMP, adding that beyond data center buildout, photonics demand could come from another key segment growing at pace in China: robotics.

“China is moving very fast in real-world physical AI deployment,” the exec said. “We are combining our semiconductor technologies with processor IP and software capabilities to evolve into a more holistic technology partner as this ecosystem rapidly unfolds.”