GlobalFoundries (GF), a leading semiconductor manufacturer, has been awarded up to $1.5 billion in funding under the US CHIPS and Science Act. This significant investment, part of GF’s larger $13 billion plan to expand its US production capacity over the next decade, will bolster domestic chip production and address critical supply chain vulnerabilities. The funding comes despite a recent $500,000 fine levied against GF for sanctions violations involving shipments to a Chinese affiliate.
The Department of Commerce justified the subsidy, highlighting GF’s unique position as the only US-headquartered company capable of providing foundry capabilities for current and mature process nodes at its scale, among only four such companies globally outside of China. The urgency of this investment is underscored by semiconductor shortages experienced during the COVID-19 pandemic, which disrupted supply chains and impacted the availability and pricing of numerous goods. Secretary of Commerce Gina Raimondo emphasized the importance of securing a stable domestic supply of chips for everything from consumer electronics to advanced weapons systems.
GF plans to utilize the funding across three key projects:
Expansion of Fab 1 in Malta, New York: This project involves installing new equipment and transferring technologies from GF’s international facilities in Singapore and Germany to increase domestic chip production for the automotive sector.
Modernization of the Essex Junction, Vermont facility: This upgrade will boost the production capacity of gallium nitride (GaN) semiconductors, crucial components for electric vehicles, data centers, IoT devices, and smartphones.
Construction of a new cleanroom module at Fab 1: This new facility will manufacture chips for a variety of markets, including AI, aerospace, and defense, significantly increasing the campus’s overall production capacity threefold over the next decade.
These expansions are projected to create nearly 1,000 manufacturing jobs and over 9,000 construction jobs. The total investment includes additional funding from New York State’s Green CHIPS Program, Vermont, GF’s partners, and strategic customers. GF’s facilities in New York and Vermont are accredited under the Trusted Foundry program, ensuring secure chip manufacturing for the US Department of Defense and other agencies. The disbursement of funds will be contingent upon GF meeting specific project milestones, including construction, production, and commercial targets. The long-term security of this funding remains a topic of discussion, given potential future legislative changes.
