The Biden administration awarded $1.5 billion to the nation’s largest domestic semiconductor manufacturer — the first major grant from the $52 billion Chips Act passed nearly two years ago.
GlobalFoundries, the world’s third-largest contract chip maker, will build a new semiconductor production facility in Malta, NY, as well as expand existing operations at the plant and another in Burlington, Vt., according to a preliminary agreement with the Commerce Department.
The grant will be accompanied by $1.6 billion in available loans, with the funding expected to generate $12.5 billion in overall potential investment across the two states.
“The chips that GlobalFoundries will make in these new facilities are essential chips to our national security,” Commerce Secretary Gina Raimondo told reporters at a briefing.
GlobalFoundries intends to use the funding to help pay for the construction of a new advanced chip factory in Malta, located about 30 miles north of Albany. It will also increase production at the existing plant in Malta as part of a strategic agreement with General Motors, and revitalize its plant in Burlington, Vermont.
The projects are expected to create 1,500 manufacturing jobs and 9,000 construction jobs over the next decade.
As part of the terms of the deal, $10 million would be dedicated to training workers. GlobalFoundries also will extend its existing $1,000 annual subsidy for child care and child care support services to construction workers.
The chips, as small as a fingernail, are used in satellite and space communications and the defense industry, the officials said, in addition to everyday applications such as blind spot detection and collision warnings in cars and electric vehicles, along with WiFi and cellular connections.
In August 2022, Biden signed the bipartisan CHIPS Act to bolster domestic production of semiconductors to hedge against China’s saber-rattling aimed at Taiwan — a key supplier of the world’s advanced computer chips.
It includes $39 billion in direct grants and another $13 billion for research and development, as well as workforce training. There is also an additional $75 billion in loans and loan guarantees.
Thus far, the government has awarded just a $35 million grant to BAE Systems to increase production at a New Hampshire factory making chips for military aircraft, including F-15 and F-35 jets.
In December, Samsung, the Korean electronic giant, announced that it would delay production at its new chip manufacturing plant in Texas until 2025.
The announcement came just months after its top rival, Taiwan Semiconductor Manufacturing Co., said it would postpone production at its new Arizona facility, which was scheduled to begin this year, until 2025.
TSMC, whose customers include tech behemoths Apple and Nvidia, said the delay was due to the company’s difficulties in finding skilled workers as well as higher-than-anticipated expenses.
The company, which is investing $40 billion in the new plant in Arizona, has reportedly sought $15 billion in CHIPS Act funds.
But TSMC has balked at some of the strings attached by Washington to the proposed funding, which include a requirement to share profits from the factories as well as detailed information about its operations.
With Post Wires
