They haven't told us what happened to him yet, only that he's not with the dharma people anymore. I imagine whenever we see whats going on with him it will link up with that scene with him at the very beginning of the season. Where they are drilling under the orchid station.
Faraday was at least alive and well in the late 1970's when The Orchid was being constructed as we saw in "Because You Left" and he's still on the main cast list and may have an upcoming flashback episode, so he's going to be back pretty soon on our screens.
