The US plans to award US$1.5 billion to GlobalFoundries Inc, the largest domestic maker of made-to-order semiconductors, as part of the White House’s effort to bolster the nation’s chip production.
The funding, outlined in a nonbinding preliminary agreement, would flow to three projects: a new fabrication facility in Malta, New York, the expansion of an existing site in Malta and expansion of its Burlington, Vermont, manufacturing site. The US is also offering the company US$1.6 billion in federal loans.
“Today’s investment will protect our national security by expanding domestic production of chips used in technology such as satellites and space communications,” White House National Economic Council Director Lael Brainard said on a call with reporters.
The funding comes under the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, which the US Congress passed in 2022 to reinvigorate US semiconductor production in the face of concern over global supply chains, production costs and geopolitical risks including to Taiwan. At the same time, US-China tension over technology is growing ahead of the November presidential election.
GlobalFoundries is a defense and industry contractor whose partners include General Motors Co and Lockheed Martin Corp.
Chips produced at the sites are expected to be exported globally, securing long-term economic benefits, a senior administration official said.
US Senate Majority Leader Chuck Schumer, a New York Democrat, said it is the biggest preliminary award yet under the CHIPS Act, adding that he is “proud that it’s the biggest announcement yet that has happened in New York State.”
The projects are expected to create about 1,500 manufacturing and 9,000 construction jobs over the next decade, the US Department of Commerce said.
GlobalFoundries is a contract manufacturer of chips — what is known as a foundry — meaning it produces semiconductors for other companies. It is a much smaller competitor to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which helped pioneer the foundry concept, but the largest such company based in the US.
The CHIPS Act includes US$39 billion in direct grants as well as loans and loan guarantees worth US$75 billion, although divvying up the support has been a slow process.
Intel Corp has been in talks with US President Joe Biden’s administration to receive more than US$10 billion in subsidies, Bloomberg reported last week. That would be the largest award yet.
Intel has been working on an expansion of its US factories, including a planned project in Ohio that could be the world’s largest. The company has said that the speed of those efforts hinges in part on the amount of government incentives it receives.
The commerce department previously announced two smaller CHIPS Act grants, setting aside funds for the US subsidiary of BAE Systems PLC and Microchip Technology Inc. TSMC and Samsung Electronics Co are expected to get CHIPS Act funds as well, helping them pay for new factories in the US.
More than 80 percent of GlobalFoundries is owned by the government of Abu Dhabi, which assembled the business by acquiring parts of various companies and putting them together.
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