US Semiconductor Giant GlobalFoundries recently received a $1.5 billion funding grant from the Biden administration as part of the Chips Act. This major grant aims to bolster domestic semiconductor production and reduce reliance on foreign suppliers, especially in light of the tensions between China and Taiwan. GlobalFoundries plans to use the funding to build a new semiconductor production facility in Malta, NY, and expand operations at its existing plant in Burlington, Vt.
The chips that GlobalFoundries will produce are crucial for national security, according to Commerce Secretary Gina Raimondo. These chips are used in various applications, including satellite and space communications, the defense industry, blind spot detection and collision warnings in vehicles, and WiFi and cellular connections. The production of these chips will not only strengthen national security but also contribute to everyday technological advancements.
The funding provided by the Chips Act is not limited to grants; it also includes $1.6 billion in available loans. This financial support is expected to generate around $12.5 billion in overall potential investment across the two states. In addition to creating manufacturing jobs, the projects are estimated to generate approximately 9,000 construction jobs over the next ten years.
As part of the agreement, GlobalFoundries will allocate $10 million for worker training. The company also plans to extend its existing child care subsidy to construction workers, providing support for employees with childcare responsibilities.
The Biden administration’s focus on bolstering domestic chip production is a response to concerns over China’s aggression towards Taiwan, a key supplier of advanced computer chips. The Chips Act includes $39 billion in direct grants, $13 billion for research and development, and an additional $75 billion in loans and loan guarantees. However, GlobalFoundries is one of the few companies that have received substantial funding so far. BAE Systems was awarded a $35 million grant to increase chip production for military aircraft, while Samsung and Taiwan Semiconductor Manufacturing Co. (TSMC) have faced delays and challenges in their chip manufacturing plans.
TSMC, a major player in the semiconductor industry with clients like Apple and Nvidia, had initially planned to begin production at its new Arizona facility this year. However, due to difficulties in finding skilled workers and higher-than-expected costs, production has been delayed until 2025. TSMC has also sought $15 billion in funds from the Chips Act but has expressed concerns about some of the conditions attached to the funding, including profit sharing and detailed operational information.
The funding received by GlobalFoundries is a significant step towards strengthening domestic semiconductor manufacturing capabilities. By reducing reliance on foreign suppliers and increasing domestic production, the US aims to secure its technological future and national security. The Chips Act plays a crucial role in achieving this goal by providing the necessary financial support for companies like GlobalFoundries. As the largest domestic producer of semiconductors, GlobalFoundries is well-positioned to contribute to the growth of the industry and create employment opportunities in the US.
The Biden administration’s commitment to domestic chip production is a strategic move that aligns with its broader agenda of promoting domestic manufacturing and reducing dependence on foreign supply chains. With the support of the Chips Act, the US semiconductor industry is poised for significant growth, ensuring the country’s technological leadership in key sectors and enhancing national security.
