Sivers Semiconductors witnessed a dramatic 65% surge in its Stockholm-listed shares on Tuesday following the announcement of a strategic collaboration with GlobalFoundries. The Swedish photonics specialist revealed that its laser arrays will be integrated into GlobalFoundries' silicon-photonics reference designs, targeting optical interconnects for AI data centers. GlobalFoundries shares were trading near $79.93 ahead of the U.S. market open.
Addressing AI Data Center Bottlenecks
The partnership comes as AI systems face increasing challenges beyond processor limitations. These systems require efficient data transfer between chips and racks while minimizing heat and power consumption. Optical interconnects, which use light instead of electrical currents, are emerging as a solution. Sivers' lasers will be incorporated into reference designs on GlobalFoundries' silicon-photonics platform, which leverages light for high-speed data transmission within chips and packages.
Market Potential and Technology Focus
The companies are targeting the pluggable-optics market, which they estimate could reach $25 billion by 2030. Their collaboration focuses on co-packaged optics (CPO), where optics are placed directly next to processors or switches, and linear pluggable optics (LPO), swappable modules designed to reduce power consumption and complexity in high-speed networks. Sivers' lasers will be offered through GlobalFoundries' SCALE optical-engine platform.
Raymond Biagan, Chief Revenue Officer at Sivers, emphasized that AI workloads demand “higher bandwidth, improved energy efficiency, and scalable optical connectivity.” Vikas Gupta, GlobalFoundries' senior fellow for silicon photonics, noted “strong momentum” as AI data-center designs push for denser bandwidth and lower power.
Industry Context and Competition
The chip industry is increasingly focused on optical interconnects. STMicroelectronics announced on Tuesday that it expects to decide by year-end whether to expand its Crolles fab in France, citing rising demand for silicon photonics driven by AI. Last year, Reuters reported that Nvidia had partnered with TSMC to package some networking chips with optical links. GlobalFoundries has also been strengthening its position, acquiring Advanced Micro Foundry, a Singapore-based silicon-photonics firm, in November to boost its photonics capacity and research presence.
GlobalFoundries launched its SCALE platform in May, describing it as the first to meet the Optical Compute Interconnect Multi-Source Agreement, an industry standard for AI scale-up interconnects. The platform uses coarse and dense wavelength-division multiplexing to combine multiple colors of light on a single fiber, enhancing bandwidth density over copper.
Risks and Challenges
Despite the positive market reaction, the companies have not disclosed financial terms, production timelines, customer details, or revenue forecasts. Sivers reported a 22% decline in first-quarter net sales to SEK 61.9 million, attributing the drop to U.S. defense budget delays and foreign exchange pressures. Additionally, Rosen Law Firm announced on Monday that it is investigating potential securities claims against Sivers following a short report by Ningi Research, which alleged accounting and customer-contract issues. Sivers' OTC shares fell 9.2% on June 1, though the company did not address the report in its collaboration update.
As Motley Fool summarized, AI challenges extend beyond compute to chip interconnects, and this partnership aims to address that. However, for now, it remains a partnership announcement rather than a confirmation of meaningful orders.
