GlobalFoundries: $1.5B 'CHIPS Act' Boost + $600M NY Support

GlobalFoundries, a leading semiconductor foundry, has officially announced that the U.S. Department of Commerce, on Monday local time, has approved a direct subsidy of $1.5 billion under the U.S. "CHIPS and Science Act" (CHIPS Act). Additionally, the company is set to receive over $600 million in support from the state of New York over the next 10 years to facilitate its development and modernization initiatives. This substantial financial backing aims to empower GlobalFoundries in enhancing existing manufacturing capabilities and establishing new ones to meet the escalating demand for semiconductor manufacturing in the U.S., particularly in critical sectors such as automotive, aerospace, and defense.

GlobalFoundries has detailed a strategic $12 billion investment plan for its U.S. manufacturing base over the next decade. This plan includes collaborations through public-private partnerships with federal and state governments, as well as strategic ecosystem partners. The company anticipates that this investment initiative will play a pivotal role in addressing the increasing demand for domestically produced chips, fostering the creation of over 1,500 manufacturing jobs and approximately 9,000 construction jobs.

The semiconductor manufacturer has highlighted three key projects for future investments in the coming quarters:

· Expansion of the Fab 8 facility in Malta, New York, utilizing advanced manufacturing technology to produce chips for automotive applications. This expansion is critical for meeting the growing demand in the automotive industry's transition to electric and software-defined vehicles, further solidifying the significance of the Malta facility in supporting critical infrastructure.

· Construction of a state-of-the-art wafer fab module at the Malta campus to cater to the future demands of semiconductor manufacturing in the U.S. The facility will address needs in artificial intelligence, automotive, aerospace, defense, and other sectors. Combined with the expansion of existing wafer fabs, this project is poised to triple the current output in Malta over the next decade.

· Revamping the Essex Junction facility in Vermont to upgrade wafer fab tools, expand capacity, and install tools required for large-scale production of next-generation Gallium Nitride (GaN) chips. The utilization of GaN chips is witnessing a surge in various applications, including electric vehicles, data centers, communications, and power grids.

GlobalFoundries' key customers, including AMD, Qualcomm, General Motors, and Lockheed Martin, have expressed their gratitude for these subsidies. They underscore the importance of a resilient U.S. semiconductor supply chain in supporting emerging applications in industries such as automotive and the Internet of Things, as well as global trends such as 5G, artificial intelligence, and high-performance computing (HPC), including edge computing.