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U.S. Awards $1.5 Billion to Chipmaker GlobalFoundries

U.S. Awards $1.5 Billion to Chipmaker GlobalFoundries

The grant will go toward chips for the auto and defense industries, and is the largest award to date from $39 billion in government funding.

The Biden administration on Monday announced a $1.5 billion award to the New York-based chipmaker GlobalFoundries, one of the first sizable grants from a government program aimed at revitalizing semiconductor manufacturing in the United States.

As part of the plan to bolster GlobalFoundries, the administration will also make available another $1.6 billion in federal loans. The grants are expected to triple the company’s production capacity in the state of New York over 10 years.

The funding represents an effort by the Biden administration and lawmakers of both parties to try to revitalize American semiconductor manufacturing. Currently, just 12 percent of chips are made in the United States, with the bulk manufactured in Asia. America’s reliance on foreign sources of chips became an issue in the early part of the pandemic, when automakers and other manufacturers had to delay or shutter production amid a dearth of critical chips.

The award to GlobalFoundries will help the firm expand its existing facility in Malta, N.Y., enabling it to fulfill a contract with General Motors to ensure dedicated chip production for its cars.

It will also help GlobalFoundries build a new facility to manufacture critical chips that are not currently being made in the United States. That includes a new class of semiconductors suited for use in satellites because they can survive high doses of radiation.

The money will also be used to upgrade the company’s operations in Vermont, creating the first U.S. facility capable of producing a kind of chip used in electric vehicles, the power grid, and 5G and 6G smartphones. If not for the investment, administration officials said the facility in Vermont would have faced closure.

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