The Biden administration announced a $1.5 billion award to GlobalFoundries, part of efforts to boost semiconductor manufacturing in the US. Another $1.6 billion in federal loans will be available. This aims to triple GlobalFoundries’ production capacity in New York over a decade. Currently, only 12% of chips are made in the US, with most in Asia, leading to supply chain issues during the pandemic.
The funding will expand GlobalFoundries’ facility in Malta, NY, fulfilling a contract with General Motors. It will also help build a new facility for manufacturing critical chips, including those for satellites. Upgrades in Vermont will allow production of chips used in electric vehicles, the power grid, and smartphones. Without this investment, the Vermont facility faced closure.
This is part of the Biden administration’s effort to revitalize American semiconductor manufacturing. The global chip shortage during the pandemic led to economic slowdowns and supply chain disruptions. Congress passed a bill allocating over $50 billion to the semiconductor industry.
Commerce Secretary Gina Raimondo stated the award will secure chip supplies for auto manufacturers and prevent supply chain disruptions. Majority Leader Chuck Schumer highlighted the creation of construction and manufacturing jobs.
GlobalFoundries will receive the government’s first grant for workforce development. This will support training new workers for the semiconductor industry, addressing a common issue for chipmakers.
The announcement is a preliminary agreement, subject to due diligence and meeting construction and production milestones. The company will receive funding as it achieves these benchmarks.
GlobalFoundries, a major foundry, emerged from former operations of Advanced Micro Devices, focusing on chip manufacturing. It grew through acquisitions and specializes in older manufacturing technology for legacy chips.
The Biden administration targets GlobalFoundries for manufacturing legacy chips, crucial for various industries. The administration aims to counter Chinese dominance in supplying such chips, concerned about undercutting US factories.
Future announcements are expected to include awards for companies making more advanced chips. These chips are vital for artificial intelligence, smartphones, supercomputers, and military hardware.
