Dive Brief:
- The Biden administration announced a $1.5 billion funding award to New York-based chipmaker GlobalFoundries on Monday as part of the CHIPS and Science Act.
- The funds will go towards GlobalFoundries’ $11.6 billion expansion of its Malta, New York fabrication facility, as well as to update its Essex Junction, Vermont, site, the company said in an announcement.
- The Malta expansion will also receive $575 million in tax credits from the New York Green CHIPS initiative to lower construction and operation costs, Gov. Kathy Hochul announced Monday.
Dive Insight:
As part of its investment plans, GlobalFoundries will expand its existing facility in Malta, as well as build a new 358,000-square-foot semiconductor manufacturing facility.
The company’s existing facility in Malta produces 400,000 wafers a year. The new investment will add critical technologies used in GlobalFoundries’ Singapore and Germany facilities to support the U.S. automotive industry as more automakers transition from mechanical to electronic systems.
Last year, GlobalFoundries and General Motors signed an exclusive supplier agreement to power GM’s electric vehicles by producing higher quality chips at its facility in Malta, New York.
The expanding Malta project is expected to create over 1,500 manufacturing jobs and triple the existing capacity of the Malta campus over the next 10 years.
The Essex Junction site will upgrade its facilities as well as expand its capacity to produce a high-volume number of next-generation gallium nitride semiconductors for EVs, power grids, data centers, smartphones and other technologies.
With the Essex Junction and Malta site updates, the company is expected to increase production to 1 million wafers a year.
“These proposed investments, along with the investment tax credit (ITC) for semiconductor manufacturing, are central to the next chapter of the GlobalFoundries story and our industry,” President and CEO Thomas Caulfield said in a statement. “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.”
GlobalFoundries’ funding is the third and largest award made under the CHIPS and Science Act. In December, the White House awarded its first grant under the law for $35 million to defense contractor BAE Systems. In January, the Commerce Department announced plans to offer $162 million to semiconductor maker Microchip Technology.
“It was the shortages of semiconductors during the COVID-19 pandemic that raised prices for consumers and led to the shutdown of automobile manufacturing sites across the country,” Secretary of Commerce Gina Raimondo said in a statement. “Thanks to the CHIPS and Science Act, 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.”
As part of the deal with the state, GlobalFoundries must invest at least $60 million in workforce training and community investments. The investments could include academic research and development projects, workforce and talent development, onsite childcare, K-12 STEM education programming and curriculum scholarships and tuition reimbursement, according to the state’s announcement.
New York is home to over 70 semiconductor companies, including an IBM research facility in Albany and an Applied Materials’ Engineering Technology Accelerator center. The state has also been busy enacting legislation and working with semiconductor giants over the past two years to attract more investments.
Last month, the state forged a $10 billion partnership with semiconductor giants such as IBM, Micron and Applied Materials to build a chip research and development center in Albany, New York.