Source: Semiconductor Industry Watch

The US Department of Commerce said on Wednesday that it has decided to $GlobalFoundries (GFS.US)$ Provide a $1.5 billion government subsidy and open a new tab to expand semiconductor production in Malta, New York, and Vermont.

The contract, which is binding on New York-based GlobalFoundries, the world's third-largest chip foundry, finalized an initial award announced in February this year after the company said it would invest $13 billion over the next 10 years in its US manufacturing sites, which serve the automotive, smart mobile devices, Internet of Things, data centers, and aerospace and defense sectors.

Commerce Secretary Gina Raimondo (Gina Raimondo) told Reuters last week that the Commerce Department is stepping up efforts to reach final agreements with as many recipients of the 52.7 billion “Chip and Science” program created in 2022 before the end of the Biden administration's term on January 20. “We're doing our best,” Raimundo said.

The funding granted by the Department of Commerce will be used to support the expansion of GlobalFoundrys' Malta and New York plants to supply chips to the US automotive industry by adding technology already used in GF's Singapore and German plants. The GF said that the state of New York has also promised another $0.55 billion in support.

GF also plans to build a new fab in Malta, New York, to produce chips for automotive, artificial intelligence, aerospace, and defense “based on market conditions and customer needs.”

GF CEO Thomas Caulfield said, “GF's key chips are at the core of the US economy, supply chain, and national security.” He called state and federal funding the key to “making sure our customers have the American-made chips they need to succeed and win.”

The US Department of Commerce finalized its first major grant last week — providing $6.6 billion in government subsidies to **** semiconductor manufacturing companies to open a new tab US military. The first final awards came a few weeks before President-elect Donald Trump, who criticized the program, took office.

The Department of Commerce has allocated $36 billion for chip projects, of which $6.4 billion is for Samsung Texas, $8.5 billion for Intel, and$Micron Technology (MU.US)$ 6.1 billion dollars.

On November 1, the US Department of Commerce fined GlobalFoundries $0.5 million because the company did not authorize blacklisted Chinese chipmakers$SMIC (00981.HK)$An affiliated company ships the chips. GF expressed regret for this unintentional act.

Grofond reached an agreement with the United States

GlobalFoundries (GF) and the US Department of Commerce announced direct funding of up to $1.5 billion to GF through the Chip and Science Act. The award follows a previously signed preliminary memorandum of terms announced in February 2024 and will enable GF to expand its key chip manufacturing and technology development in the US, strengthen the supply chain, and support customers in a range of important end markets, including automotive, smart mobile devices, Internet of Things, data centers, aerospace, and defense.

“The idea of strengthening the US semiconductor manufacturing industry has been in the works for more than five years. With support from both parties, the idea evolved into the Chip and Science Act,” GF President and CEO Dr. Thomas Caulfield said. “GF's critical chips are at the heart of the US economy, supply chain, and national security. We are very grateful for the support and funding from the US Government and the states of New York and Vermont, and we will use these funds to ensure that our customers have the US-made chips they need to succeed and win.”

GF's CHIPS and Science Act Awards will support three projects:

1. Expand GF's existing plants in Malta and New York to add key technologies already put into production at GF's Singapore and German plants, thereby providing the US automotive industry with a safe and reliable supply of domestic key chips.

2. Modernize and upgrade GF's existing fab at Essex Junction in Vermont to expand production capacity and create one of the world's leading facilities capable of mass production of next-generation gallium nitride (GaN) semiconductors for electric vehicles, data centers, Internet of Things, smartphones, and other critical applications.

3. According to market conditions and customer needs, GF will build a new state-of-the-art fab at the New York Malta campus to meet the anticipated demand for important chips made in the US in a wide range of markets and applications such as automobiles, data centers and edge artificial intelligence, and aerospace and defense.

4. The two New York-based projects are expected to triple the current production capacity of GF Malta within the next 10 years to meet anticipated market demand and customer demand. The construction of the new plant will utilize the GF plant's existing infrastructure and ecosystem to enable a fast and efficient path from construction to production.

Overall, these projects represent GF's investment of more than $13 billion in two US plants over the next 10 years. The investment includes a $1.5 billion CHIPS and Science Act award, over $0.55 billion in support from the New York State Green CHIPS Program, and funding and support from Vermont, GF ecosystem partners, and key strategic customers, and other incentives.

These investments are expected to create nearly 1,000 direct manufacturing jobs and more than 9,000 construction jobs during the implementation of the project.

GF's New York and Vermont fabs are both Trusted Foundry certified and have partnered with the US government to produce security chips.

As part of the “CHIPS and Science Act” award, to attract and develop semiconductor talent in New York and Vermont, GF will continue to invest in and develop new workforce development efforts, including curriculum development, internship and apprenticeship programs, K-12 STEM promotion, and other education and training programs.

In line with GF's long-term commitment to the community and environment, GF's expansion and modernization design and construction plans in New York and Vermont will reflect the sustainable development goals of the company's future operations.

Edit/Rocky