Biden gov’t announces potential US$1.5 billion award to chipmaker GlobalFoundries

February 19, 2024

The U.S. government announced a plan Monday to award roughly US$1.5 billion to the New York-based chipmaker, GlobalFoundries (GF), to strengthen domestic semiconductor production, drawing attention to its support plans for foreign firms like Samsung Electronics.

The Joe Biden administration said that the Commerce Department and GF signed a non-binding preliminary memorandum of terms to provide the proposed funding under the CHIPS and Science Act to support “significant capacity expansion” and the “modernization of GF’s U.S. manufacturing sites” in New York and Vermont.

The funding plan would mark the third award of such a grant under the act, after the American subsidiary of BAE Systems Plc and Microchip Technology Inc. were previously selected as beneficiaries.

The department stressed that the funding is designed to strengthen U.S. domestic supply chain resilience, bolster U.S. competitiveness in current-generation and mature-node semiconductor production, and support economic and national security capabilities.

Vice President Kamala Harris expressed expectations that the preliminary agreement with GF would lead to various benefits, including creating thousands of “good-paying” jobs.

“The domestic production of these chips will provide more supply chain stability to the auto and aerospace industries across the United States that currently rely on the shipment of these chips from overseas,” Harris said in a statement.

Secretary of Commerce Gina Raimondo stressed the importance of semiconductors used in “everything” from cellphones to cars and advanced weapons systems, while noting that America had suffered chip shortages during the COVID-19 pandemic that raised prices for consumers and led to the shutdown of automobile production sites.

“We’re working to onshore these critical technologies in order to bolster the supply of domestic chips that are essential to manufacturing cars, electronics, and national defense systems in New York, Vermont, and states across the country,” she was quoted as saying in a press release.

The proposed funding for GF is to be split across a set of projects, including the construction of a new, large-scale 300 mm fabrication facility in Malta, New York, and the revitalization of an existing fabrication facility in Burlington, Vermont.

The department said that the proposed projects would create approximately 1,500 manufacturing jobs and approximately 9,000 construction jobs over the next 10 years.

As Biden is running for reelection, his administration has been highlighting his economic achievements, including those from the Inflation Reduction Act and the CHIPS and Science Act.