The Biden administration said on Monday that the United States government is giving GlobalFoundries a $1.5 billion contract to increase semiconductor manufacture. This move is an attempt to fortify domestic supply chains following the COVID-19 pandemic’s exposure of flaws.
A preliminary deal with the Commerce Department states that GlobalFoundries, the third-largest contract chipmaker in the world, will expand its operations in Burlington, Vermont, and develop a new semiconductor production facility in Malta, New York.
According to the government, the $1.5 million grant and the $1.6 billion in available loans will result in an estimated $12.5 billion in potential investment between the two states.
According to representatives of the Biden administration, the projects, which are supported by the CHIPS and Science Act, would create over 10,000 employment over the course of ten years. The jobs will come with amenities like daycare and fair wages.
During a press event, Commerce Secretary Gina Raimondo stated, “The chips that GlobalFoundries will make in these new facilities are essential chips to our national security.”
The tiny chips, which are about the size of a fingernail, are employed in the defense sector, satellite and space communications, and commonplace uses like blind spot detection and collision alerts in cars and electric vehicles, in addition to Wi-Fi and cellular connections, according to the officials.
Thomas Caulfield, president and CEO of GlobalFoundries, stated in a statement that “as an industry, we now need to turn our attention to increasing the demand for U.S.-made chips, and to growing our talented U.S. semiconductor workforce.”
As part of a significant worldwide manufacturing expansion, GlobalFoundries inaugurated a $4 billion semiconductor fabrication unit in Singapore in September.
According to Raimondo, this is the government’s third CHIPS announcement, and her agency intends to award several grants from the $39 billion initiative to increase semiconductor manufacturing in the upcoming weeks and months.
“We’re just getting started,” she declared.
According to Raimondo, the development of the Malta facility will provide a consistent supply of chips for automakers and suppliers, including General Motors (GM).
On February 9, GlobalFoundries and GM announced a long-term agreement that will enable the carmaker to obtain processors made in the United States, preventing factory shutdowns caused by chip shortages that prevented the production of millions of automobiles during the COVID-19 epidemic.
“Today’s announcement will ensure that this doesn’t happen again,” Raimondo stated during the agreement briefing on Sunday.
She said, “The new plant in Malta will make premium chips that aren’t made anywhere in the US right now.”
According to her, the renovated Burlington factory will be the first in the country to produce next-generation gallium nitride on silicon semiconductors in large quantities for usage in smartphones, electric cars, and the power grid.