GlobalFoundries Inc. has secured $1.5 billion in funding from the U.S. government to construct a new fab and upgrade two existing chip manufacturing facilities. The grant was announced by the company and will be provided through the CHIPS and Science Act, which allocates $52.7 billion in subsidies to the semiconductor sector. Intel Corp. is also expected to receive financing under the legislation as it plans to invest over $30 billion in new U.S. fabs.
GlobalFoundries currently operates a chip plant in Essex Junction, Vermont, employing over 2,000 workers. A portion of the $1.5 billion grant will be used to expand the capacity of the fab and make it capable of producing gallium nitride chips in large volumes. Gallium nitride chips have a wider bandgap than silicon, allowing them to operate at higher voltages and withstand heat better. These chips are used in various sectors such as electric vehicles, electrical grids, data centers, and wireless networking equipment.
The funding received by GlobalFoundries will also finance two other fab projects at its manufacturing campus in Malta, New York. The upgrades will focus on addressing the requirements of auto sector customers, as the auto sector accounted for 17% of GlobalFoundries’ revenue last quarter. Additionally, a second fab will be built on the Malta campus to produce chips for multiple markets including automotive, aerospace, defense, and artificial intelligence.
Once construction is complete, GlobalFoundries’ two plants in New York are expected to have a combined production capacity of 1 million wafers per year. The company aims to triple the capacity of the Malta campus over the next decade. Alongside the $1.5 billion in direct funding, GlobalFoundries will also receive access to $1.6 billion worth of loans. The planned investments are estimated to create 1,500 manufacturing jobs and 9,000 construction jobs.
GlobalFoundries CEO Thomas Caulfield stated that these investments, along with the investment tax credit for semiconductor manufacturing, will make the U.S. semiconductor ecosystem more competitive and resilient, solidifying the New York Capital Region as a global semiconductor hub.
Intel is also expected to receive CHIPS Act financing for its new fabs being built in the U.S. More than 100 other semiconductor industry players have applied for CHIPS Act Funding.
