WASHINGTON - The US government is awarding US$1.5 billion (S$2 billion) to GlobalFoundries to subsidise semiconductor production, the first major award from a US$39 billion fund approved by Congress in 2022 to bolster domestic chip production.
GlobalFoundries, the world’s third-largest contract chipmaker, will build a new semiconductor production facility in the town of Malta in New York, and expand existing operations there and in the city of Burlington in Vermont, according to a preliminary agreement with the Commerce Department.
The department in January announced a US$162 million planned award to Microchip Technology and US$35 million to a BAE Systems facility in New Hampshire in December 2023.
The US$1.5 billion GlobalFoundries grant will be accompanied by US$1.6 billion in available loans, with the funding expected to generate US$12.5 billion in overall potential investment across the two states, the department said.
“The chips that GlobalFoundries will make in these new facilities are essential chips to our national security,” Commerce Secretary Gina Raimondo told reporters on Feb 18.
Ms Raimondo said in February the agency is in active talks with numerous applicants and expects to make several announcements by the end of March.
“We’re in the process of really complicated, challenging negotiations with these companies,” Ms Raimondo told Reuters.
“These are highly complex, first-of-their-kind facilities. The kind of facilities that TSMC (Taiwan Semiconductor Manufacturing Company), Samsung, Intel, are proposing to do in the United States – these are new-generation investments – size, scale complexity that’s never been done before in this country.”
The GlobalFoundries chips are used in satellite and space communications and the defence industry, as well as blind spot detection and collision warnings in vehicles and Wi-Fi and cellular connections.
“As an industry, we now need to turn our attention to increasing the demand for US-made chips, and to growing our talented US semiconductor workforce,” GlobalFoundries chief executive Thomas Caulfield said in a statement.
GlobalFoundries opened a US$4 billion semiconductor fabrication plant in Singapore in September 2023, as part of a major global manufacturing expansion.
The Malta facility expansion will secure a stable supply of chips for auto suppliers and manufacturers, including General Motors, Ms Raimondo said.
GlobalFoundries and General Motors on Feb 9 announced a long-term deal for the carmaker to secure US-made processors that will help it avoid factory-halting chip shortages, such as the ones during the Covid-19 pandemic.
The new facility in Malta will produce high-value chips that are not currently made anywhere in the US, said Ms Raimondo. REUTERS
