The Biden administration has provided GlobalFoundries, a major semiconductor manufacturer, with a funding boost of $1.5 billion. This funding, distributed under the CHIPS Act, aims to augment US semiconductor production. The company, which initially branched out from AMD in 2009, also has access to an extra $1.6 billion in loans from the CHIPS Program Office.
GlobalFoundries’ Expansion Plans
GlobalFoundries is set to use the funding for three main projects. First, they plan to build a new manufacturing plant in Malta, New York. The goal is to produce “high value technologies not currently available in the US,” as stated by the Department of Commerce. The firm plans to create chips for various sectors and purposes at this facility, including automotive, aerospace, defense, and AI, with construction scheduled to start in 2025.
Boost in Semiconductor Production
In addition to constructing a new facility, GlobalFoundries also plans to broaden its current Malta facility by integrating technology from its branches in Singapore and Germany. This step is aimed at heightening semiconductor production for vehicles. This expansion along with the new manufacturing plant will enable GlobalFoundries to triple the capacity of its Malta campus over the forthcoming decade. The company foresees an increase in wafer production to 1 million per year across both plants once all stages of both projects are finalized.
Upgrading Existing Facilities
The remaining funds will be allocated towards upgrading a current manufacturing plant in Burlington, Vermont. The goal is to establish the first US plant capable of mass-producing next-generation gallium nitride on silicon semiconductors. These semiconductors are crucial for electric vehicles, smartphones, the power grid, and other essential technologies. The plant will be powered entirely by carbon-free energy, with an on-site solar system providing up to nine percent of annual power needs.
Investment and Job Creation
Through public-private collaborations, GlobalFoundries intends to invest over $12 billion into these sites over the next decade or more. The state of New York is also backing the Malta projects with $575 million in performance-based Green CHIPS tax credits, and the New York Power Authority is investing a minimum of $30 million.
The Department of Commerce projects that these three projects will generate 1,500 manufacturing jobs and around 9,000 construction jobs over the next decade. These roles are predicted to offer fair wages and benefits, including childcare.
Conclusion
This investment aligns with the wider objectives of the CHIPS Act, aimed at enhancing domestic semiconductor supply chains. GlobalFoundries is one of only four companies outside of China capable of delivering “current and mature foundry capabilities” at its scale, and it’s the sole one headquartered in the US.
In the previous year, GlobalFoundries established a direct supply agreement with GM to supply the car manufacturer with US-made processors, assisting it in avoiding chip shortages that led to a significant slowdown in car manufacturing during the COVID-19 pandemic. The company also secured a chip deal with Ford in 2021.
Q&A
Q: What is the objective of the $1.5 billion funding from the Biden administration?
A: The aim of this funding is to fortify US semiconductor production under the CHIPS Act.
Q: What are GlobalFoundries’ plans for utilizing this funding?
A: The firm intends to construct a new manufacturing plant in Malta, New York, expand their current Malta facility, and upgrade an existing fab in Burlington, Vermont.
Q: How will these projects influence job creation?
A: The Department of Commerce anticipates these projects will create 1,500 manufacturing jobs and approximately 9,000 construction jobs over the next 10 years.
Q: What is the importance of GlobalFoundries’ agreements with GM and Ford?
A: These agreements guarantee a direct supply of US-made processors to these car manufacturers, helping them avoid the type of chip shortages that led to a significant slowdown in car production during the COVID-19 pandemic.
