The Biden administration on Monday announced a potential $1.5 billion direct investment with semiconductor manufacturer GlobalFoundries [GFS] to expand computer chip production capacity in the U.S. in support of industries such as automative, aerospace, and defense.
The chip manufacturing funding would come from the 2022 CHIPS and Science Act that aims to strengthen the U.S. domestic supply chain for semiconductors, which are used in a wide range of consumer and industrial applications, including aircraft and missiles.
“Semiconductors are in everything from our cellphone, to refrigerators, to cars, and our most advanced weapons systems, and access to them carries important economic and national security implications,” Commerce Secretary Gina Raimondo said in a statement. “It was the shortages of semiconductors during the COVID-19 pandemic that raised prices for consumers and led to the shutdown of automobile manufacturing across the country.”
The potential $1.5 billion funding was part of a non-binding preliminary memorandum of terms (PMT) between the Commerce Department and New York-based GlobalFoundries. The funding would be put toward three projects: a new large-scale 300-millimeter fabrication facility in Malta, N.Y., for high value technologies not currently produced in the U.S. that can be used for automotive, aerospace, defense and artificial intelligence, an expanded fabrication facility in Malta for semiconductor technologies for the automotive industry—which includes an agreement with General Motors [GM]—and revitalization of an existing fabrication in Burlington, Vt., to commercialize new 200mm technologies used for electric vehicles, next-generation smartphones, and other critical applications.
For the new facility in Malta, GlobalFoundries said it “will be uniquely positioned to capture the feature-rich mature, essential chip market which is expected to continue to represent more than 60 percent of the semiconductor market.”
New York Gov. Kathy Hochul (D) on Monday announced $575 million in state funding for the Malta projects. Additionally, Global Foundries said there will be $30 million infrastructure upgrades and energy incentives provided by the New York Power Authority, and $15 million in workforce development activities for the company funded by the state.
GlobalFoundries expects the combined investments to create 1,500 manufacturing jobs and 9,000 construction jobs during the life of the projects.
The Commerce Department said that the PMT includes $1.6 billion in loans for GlobalFoundries from the CHIPS program office. It also said that the combined potential and private investment GlobalFoundries projects is about $12.5 billion.
Last summer, Lockheed Martin [LMT] and GlobalFoundries announced a strategic collaboration to strengthen the domestic industrial base for semiconductors and bolster the defense company’s ability to serve its customers (Defense Daily, June 12, 2023). At the time, the companies said their collaboration will drive semiconductor innovation and the development of a chiplet ecosystem for faster and more affordable production. Chiplets are computer chips that are packaged more closely together as part of a module that does into a computer processor.