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Federal Investment Aims To Bolster US Semiconductor Production

Photo Courtesy GlobalFoundries

The COVID-19 pandemic hit many industries hard, and the U.S. auto industry felt some of the most significant blows. According to a report from JP Morgan, production and supply-chain issues led to a massive shortage of microchips used in vehicles, causing global auto production to slump 26% during the first nine months of 2021. The shortage also led to a series of U.S. auto industry shutdowns, layoffs, and furloughs, The New York Times reported.

Although the situation has improved, U.S. government officials are still taking steps to prevent the same thing from happening again. Much of this effort will be funded by the $52 billion CHIPS and Science Act, which was signed in 2022. According to Spectrum News, the law is designed to “supercharge” the U.S. semiconductor industry in the wake of pandemic shortages and concerns over American dependence on foreign-made chips.

Photo Courtesy GlobalFoundries  

One of the beneficiaries is GlobalFoundries (GF), a New York-based chipmaker. In February, the current administration announced a $1.5 billion grant to GlobalFoundries as part of the CHIPS and Science Act.

The New York Times reported that the grant will help GF expand its existing facility in Malta, New York, enabling it to fulfill a contract with General Motors to provide dedicated chip production for its cars. According to a Feb. 19 press release, the money will also be used to upgrade the company’s operations in Vermont and create the first U.S. facility capable of producing a kind of chip used in electric vehicles, the power grid, and 5G and 6G smartphones.

Photo Courtesy GlobalFoundries 

GF plans to invest more than $12 billion over the next 10-plus years across its two U.S. sites. Those investments will involve public-private partnerships, with support from federal and state governments, GF partners, and customers.

The press release said New York Gov. Kathy Hochul announced $575 million in planned direct funding for New York State Green CHIPS. In addition, $15 million in planned funding will go toward New York State Workforce Development activities for GF and $30 million in planned funding for NYS Infrastructure upgrades and energy incentives provided by the New York Power Authority (NYPA).

“This $11 billion investment from GlobalFoundries is a game changer, and with the partnership of the Biden administration, New York’s congressional delegation, and all of our local stakeholders, the best is yet to come,” Hochul said in a statement.

Photo Courtesy GlobalFoundries  

The combined investments are expected to create more than 1,500 manufacturing jobs and about 9,000 construction jobs over the life of the projects. 

Dr. Thomas Caulfield, GF president and CEO, said the investments will “play an important role in making the U.S. semiconductor ecosystem more globally competitive and resilient.”

“With new onshore capacity and technology on the horizon, as an industry, we now need to turn our attention to increasing the demand for U.S.-made chips and to growing our talented U.S. semiconductor workforce,” Caulfield added.

As The New York Times reported, these investments and projects are part of White House efforts to bolster U.S. chip manufacturing after many factories relocated to Asia in recent decades. Gina Raimondo, U.S. Secretary of Commerce, said the GF award will help secure a stable supply of chips for key auto suppliers and manufacturers and prevent “supply chain hiccups.” 

“Today’s announcement will ensure that this doesn’t happen again,” Raimondo said.

U.S. Sen. Chuck Schumer, who helped craft the CHIPS and Science Act, also lauded the GF investment.

Photo Courtesy GlobalFoundries

“This will triple production capacity of GlobalFoundries’ already massive campus in Saratoga County, spur billions in public-private investment, and help bring thousands of new good-paying manufacturing and union construction jobs to the Capital Region,” Schumer said in a statement. “We all remember the days of the pandemic when chip shortages skyrocketed car prices and created supply chain issues leading to months-long wait times for cars and electronics, and investments like this are how we can help prevent that from happening again.”


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