$1.5 Billion Funding To GlobalFoundries To Boost U.S. Semiconductor Industry

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The U.S. semiconductor manufacturer intends to allocate the funds for constructing and enlarging its production facilities in New York and Vermont.

The Biden administration revealed a substantial $1.5 billion funding award to GlobalFoundries, a New York-based semiconductor manufacturer, as part of the CHIPS and Science Act. This financial injection is earmarked for the company’s ambitious $11.6 billion expansion of its Malta, New York fabrication facility and for updates to its Essex Junction, Vermont site. Additionally, Governor Kathy Hochul announced that the Malta expansion will benefit from $575 million in tax credits from the New York Green CHIPS initiative, aimed at reducing construction and operational costs.

In a significant move to enhance its semiconductor manufacturing capabilities, GlobalFoundries announced a comprehensive investment strategy involving the expansion of its Malta facility and the construction of a new 358,000-square-foot semiconductor production plant. This initiative is poised to bolster GlobalFoundries’ production capacity, adding advanced technologies from its Singapore and Germany operations, particularly to support the burgeoning demand from the U.S. automotive sector as it shifts towards electronic systems. 

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The partnership between GlobalFoundries and General Motors, established last year through an exclusive supplier agreement, aims to elevate the quality of chips for GM’s fleet of electric vehicles, leveraging the production capabilities of the Malta, New York facility. This expansion is projected to generate over 1,500 manufacturing roles and significantly enhance the Malta campus’s capacity by threefold over the ensuing decade.

Additionally, upgrades at the Essex Junction site will augment its output of next-gen gallium nitride semiconductors, crucial for electric vehicles, power grids, data centers, smartphones, and various other applications. Collectively, these upgrades at both Malta and Essex Junction sites are expected to escalate GlobalFoundries’ annual wafer production to 1 million.

President and CEO Thomas Caulfield emphasized the pivotal role of these investments and the semiconductor manufacturing investment tax credit (ITC) in advancing GlobalFoundries’ growth and the broader industry’s development. He highlighted the importance of boosting demand for U.S.-manufactured chips and expanding the domestic semiconductor workforce.

GlobalFoundries’ funding marks the largest allocation under the CHIPS and Science Act, following a $35 million grant to BAE Systems and a $162 million funding announcement for Microchip Technology. These initiatives aim to mitigate semiconductor shortages experienced during the COVID-19 pandemic, which had profound implications on consumer prices and automobile production.

The agreement with the state mandates GlobalFoundries to invest a minimum of $60 million in workforce training and community initiatives, potentially encompassing academic R&D projects, workforce development, and educational programming.

New York, a hub for over 70 semiconductor firms, continues to attract significant investments in the sector, evidenced by a recent $10 billion partnership with industry leaders like IBM, Micron, and Applied Materials for a new chip R&D center in Albany. This concerted effort underscores the state’s commitment to reinforcing its position as a leading center for semiconductor research and manufacturing.

 

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