Biden Administration Awards $1.5 Billion to GlobalFoundries: Boosting U.S. Chip Manufacturing
The Biden administration announced a $1.5 billion award to GlobalFoundries, a New York-based chipmaker, marking a significant grant from a government program aimed at revitalizing semiconductor manufacturing in the United States. Alongside this award, an additional $1.6 billion in federal loans will be made available, expected to triple GlobalFoundries’ production capacity in New York over a decade.
The funding underscores bipartisan efforts to bolster American semiconductor manufacturing, aiming to address the nation’s reliance on foreign chip sources, especially evident during the pandemic-induced chip shortage. This grant aims to expand GlobalFoundries’ facility in Malta, N.Y., facilitating a contract with General Motors for dedicated chip production for automobiles.
Moreover, the investment will enable GlobalFoundries to construct a new facility for manufacturing critical chips currently unavailable in the United States, including semiconductors tailored for satellite use, resilient to high radiation levels. Additionally, upgrades to operations in Vermont will establish the first U.S. facility capable of producing chips essential for electric vehicles, the power grid, and advanced smartphones.
This initiative aligns with the Biden administration’s broader strategy to rejuvenate American semiconductor manufacturing, critical after many factories relocated to East Asia. The pandemic-induced chip shortage highlighted the vulnerability of U.S. industries, particularly automotive, prompting Congress to pass a bill allocating over $50 billion to the semiconductor sector.
Gina Raimondo, the commerce secretary, emphasized the grant’s role in securing chip supplies for key industries, preventing future disruptions. Senator Chuck Schumer highlighted the substantial economic impact, estimating over $12 billion in U.S. investments and the creation of thousands of jobs.
Notably, GlobalFoundries will receive the government’s first grant dedicated to workforce development, addressing the industry’s shortage of skilled workers. However, officials stress that the agreement is preliminary, subject to due diligence and milestone achievements.
GlobalFoundries’ specialization in legacy chips, vital for automotive and defense applications, aligns with Biden’s focus, aiming to counter China’s growing dominance in semiconductor manufacturing. While Chinese companies expand capabilities in newer chip technologies, U.S. efforts prioritize securing the supply chain for essential legacy chips.
Looking ahead, the administration is expected to announce further awards for companies specializing in advanced chip technologies, crucial for AI, smartphones, and military hardware.
