GlobalFoundries announced finalization of its US CHIPS award for $1.5 billion on Wednesday, the second major award to be completed in the final weeks of the Biden administration.
The preliminary agreement between GF and the Commerce Department was reached in February to support GF’s New York expansion lans and a Vermont facility expansion.
The Malta, NY, expansion adds technologies already in production in Singapore and Germany, but making them them domestic for the US auto industry. Also, the funds will support an upgrade to the GF fab in Essex Junction, Vermont, to create high-volume manufacturing of gallium nitride semiconductors used in electric vehicles, data centers, IOT, smartphones and more.
Also, the Malta campus is expected to get a new fab for expected demand for essential chips used in auto, AI, data center and edge, as well as aerospace and defense. The projects in New York are expected to triple capacity at the Malta campus in coming years. All three projects represent $13 billion of investment in the next decade or longer, including the $1.5 billion under the CHIPS act.
GF CEO Thomas Caulfield said the idea of strengthening US semiconductor manufacturing has been in the works for more than five years. “With bipartisan support, that idea evolved into the CHIPS and Science Act,” he added in a statement. “GF’s essential chips are at the core of US economic, supply chain and national security.”
Many applicants for CHIPS Act grants have been concerned about finalizing their agreements before President-elect Donald Trump assumes office on Jan. 20. They worry about his comments in October calling the CHIPS Act “so bad,” which was followed by House Speaker Johnson’s quick comment, later reversed, that the next Congress “probably will” try to repeal the law.
Defenders of the CHIPS Act note it was passed by a large bipartisan vote in 2022, showing that even with Trump’s concerns over the act, there are some Republicans who favored the incentives in the Act that go beyond grants and include a 25% tax credit and loans.
While some analysts believe Trump won't derail the CHIPS Act, it isn't clear how he would modify it. He has mentioned widespread tariffs on imported goods, which could encourage foreign companies to build operations in the US to supplant part of the need for government grants to spur chip and related electronics manufacturing. Semiconductor Industry Association CEO John Neuffer praised the GF final award in a statement, adding, "We urge leaders in Washington get more CHIPS agreements finalized expeditiously to help keep America on top in chip technology in many years to come."
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In recent months, CHIPS for America has announced 22 recipients of proposed grants that total $36 billion of the $39 billion reserved for grants in the $52 billion original CHIPS and Science Act that became law in 2022 with bipartisan support. Of those 22, the program recently announced final agreements with TSMC and Polar Semiconductor with GF added to that short list on Wednesday.
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