Ephos, a Milan-based company pioneering glass-based photonic integrated circuits (PICs), has secured a €41.5 million grant from the Italian Ministry of Enterprises and Made in Italy under the EU Chips Act. This funding supports the construction of Fab-2, a groundbreaking manufacturing facility dedicated to producing ultra-low-loss, fast-switching photonic chips on glass substrates.
The overall project represents a €104.9 million investment, making it one of Europe’s most ambitious moves in advanced photonics manufacturing. When completed, Fab-2 will be the first facility in the world to process advanced optical materials on glass, marking a significant milestone not just for Italy, but for Europe’s strategic positioning in the global semiconductor race.
A new foundation for AI and quantum
Ephos says its glass photonic chips are designed to meet the intense performance and efficiency demands of next-generation computing. These chips are expected to play a foundational role in:
AI datacentres – addressing skyrocketing bandwidth and interconnect requirements.
High-performance computing (HPC) – enabling faster, low-energy data transfer in supercomputing environments.
Quantum computers – providing the ultra-low-loss optical infrastructure needed for scalable quantum architectures.
By shifting from traditional silicon to glass substrates, Ephos claims it can deliver chips with superior optical performance—particularly lower signal loss and faster switching speeds. These advances could help overcome bottlenecks in today’s semiconductor designs, where energy consumption and heat dissipation increasingly constrain scaling.
Strategic significance under the EU Chips Act
The funding award underscores the European Union’s strategic push to secure supply chains for advanced semiconductors and photonics. With the EU Chips Act allocating billions to strengthen Europe’s role in the global chip industry, projects like Ephos Fab-2 are central to ensuring technological sovereignty.
Co-founder and CEO Andrea Rocchetto highlighted this broader context:
“As artificial intelligence reshapes our economies and geopolitical landscapes, advanced chip manufacturing has become a critical strategic asset. With Fab-2, we are leveraging Europe’s exceptional engineering talent to deliver the essential components that power AI infrastructure.”
This positioning is particularly relevant as U.S. and Asian semiconductor ecosystems dominate the current market. By focusing on glass photonic chips, Ephos is targeting a niche where Europe can lead rather than follow.
From Fab-1 to Fab-2: scaling from R&D to industry
The announcement comes just 10 months after the opening of Fab-1, Ephos’ first R&D and pilot manufacturing facility in Milan. Fab-1, backed by both the EU and NATO, has already demonstrated the company’s ability to produce secure, advanced photonic chips for strategic applications.
Key milestones achieved with Fab-1 include:
Initial production runs of glass photonic chips for defense and telecom customers.
Establishing a trusted supply chain within Europe, reducing reliance on imports.
Laying the groundwork for scaling to volume production with Fab-2.
Fab-2 represents the industrial-scale expansion of these capabilities. Where Fab-1 focused on research and prototyping, Fab-2 is designed to meet growing commercial demand from AI datacentres, cloud providers, and quantum research labs.
A European edge in advanced photonics
Ephos’ bet on glass photonics aligns with Europe’s ambition to carve out leadership positions in deep-tech niches that underpin global competitiveness. Unlike traditional silicon photonics, which faces increasing limitations in scaling, glass photonics promises:
Ultra-low optical loss, critical for long-distance, high-speed data transfer.
Energy-efficient switching, reducing datacentre power consumption.
Broadband capability, supporting the high-throughput needs of AI and HPC.
If successful, Ephos’ glass-based PICs could provide Europe with a unique technological edge in the global race to develop AI-ready semiconductor platforms.
Industry implications
The launch of Fab-2 could have far-reaching effects:
For datacentre operators, it offers a pathway to dramatically lower PUE (power usage effectiveness) and improve throughput.
For quantum computing players, it enables scalable, low-loss interconnects, one of the biggest challenges to building utility-scale quantum machines.
For Europe’s industrial policy, it demonstrates tangible progress in reducing dependency on U.S. and Asian semiconductor giants.
By uniting cutting-edge research, manufacturing capacity, and government backing, Ephos positions itself at the heart of Europe’s strategic semiconductor ecosystem.
Ephos enters the global photonics race with a glass-first approach
The announcement of Fab-2, supported by a €41.5 million Italian government grant, positions Ephos as a potential disruptor in the rapidly expanding photonics sector. By betting on glass photonic integrated circuits (PICs), the company is diverging from the mainstream path of silicon photonics pursued by giants such as Intel, Cisco, and NVIDIA-backed startups.
Silicon photonics: the incumbent path
Over the last decade, silicon photonics has become the dominant platform for integrating optical functions into chips. Leaders include:
Intel – Among the earliest and most aggressive investors in silicon photonics, Intel has developed transceivers and optical interconnects for datacentres, building on its existing semiconductor manufacturing infrastructure.
Cisco (via Acacia and Luxtera acquisitions) – Leveraging its networking dominance, Cisco has integrated silicon photonics into switches and routers, targeting high-bandwidth datacentre interconnects.
Scintil Photonics (France) – Recently raised $58 million to commercialize its SHIP platform, integrating lasers, modulators, and photodiodes into single-chip optical engines for AI datacentres.
These players have one clear advantage: ecosystem maturity and manufacturing scale. Silicon photonics benefits from decades of CMOS foundry investment, providing a well-developed supply chain.
However, silicon has limitations in optical loss, bandwidth, and switching speed—factors that become critical in the context of AI superclusters and quantum computing.
Ephos’ differentiator: glass photonics
Ephos argues that glass-based PICs offer a breakthrough in overcoming these limitations. Compared to silicon:
Lower optical loss – Glass substrates enable cleaner light propagation, crucial for long-distance interconnects in AI and HPC datacentres.
Faster switching speeds – Potentially reducing latency in distributed compute systems.
Thermal stability – Glass handles temperature fluctuations better, enabling more consistent performance in high-load environments.
Material flexibility – Glass allows novel doping and integration of advanced optical materials, supporting future innovations in quantum networking.
While silicon photonics excels in manufacturability, glass could prove superior in performance—a factor that may become decisive as compute workloads push the boundaries of classical chip efficiency.
Competitors in glass photonics
Few companies have pursued glass-based PICs at scale, giving Ephos a first-mover advantage. Notable initiatives include:
Corning – Has long worked on optical materials for telecom and datacentre use, but not at the PIC manufacturing level Ephos targets.
Niche R&D programs in Japan and Germany exploring glass substrates for integrated optics.
With Fab-2, Ephos aims to move beyond research into industrial-scale production, filling a gap in the global photonics landscape.
AI datacentres: the primary battleground
The AI boom has made datacentre optics one of the hottest technology markets. Bandwidth demands between GPUs are doubling every 12–18 months, and electrical interconnects are reaching physical and energy limits.
NVIDIA – Through NVLink and partnerships with startups like Ayar Labs, NVIDIA is investing heavily in optical interconnects for GPU clusters.
Ayar Labs – A U.S. startup focusing on optical I/O for chip-to-chip communications, backed by NVIDIA and Intel.
Ranovus – Developing optical engines for datacentre and AI workloads.
Against this backdrop, Ephos’ glass photonics could offer a performance-per-watt edge, particularly as energy efficiency becomes a boardroom and regulatory priority.
Europe’s sovereignty play
The strategic significance of Fab-2 extends beyond Ephos. It aligns with Europe’s push for semiconductor sovereigntyunder the EU Chips Act, which explicitly emphasizes diversifying beyond silicon. By establishing the first glass PIC fab, Italy positions itself as a leader in an emerging domain, while Europe reduces its dependence on U.S. and Asian chip supply chains.
This is particularly important given the geopolitical competition over AI infrastructure and quantum technologies, where Europe risks falling behind without bold moves like Ephos.
Challenges for Ephos
Despite its promise, Ephos faces significant hurdles:
Manufacturing maturity – Glass processing is less standardized than silicon, requiring new tooling, process flows, and supply chain development.
Customer adoption – Convincing hyperscalers and HPC operators to adopt glass photonics over proven silicon solutions will require extensive validation.
Capital intensity – At €104.9 million, Fab-2 is significant but small compared to multi-billion-dollar fabs operated by Intel or TSMC. Scaling to global demand will likely require further financing.
Competitive response – Incumbents in silicon photonics may accelerate their own innovations in low-loss and high-speed materials.
Strategic positioning
Ephos is carving out a differentiated European niche in the global photonics market. By focusing on performance advantages of glass substrates while leveraging public funding and strategic partnerships, the company positions itself as both a technology innovator and a sovereignty enabler for Europe.
If successful, Fab-2 could:
Provide Europe’s datacentres and quantum labs with trusted, high-performance optical chips.
Compete directly with U.S. and Asian silicon photonics players.
Establish Italy as a hub for advanced photonics manufacturing.
Powered by Froala Editor