The money will help semiconductor giant GlobalFoundries build a large-scale fabrication facility at its headquarters in Malta, New York, to produce advanced chips not currently made in the United States. Will do. The grant will also help the company expand another plant in Malta, called Fab 8, and upgrade a third fab in Burlington, Vt.
A decades-long decline in U.S. chip manufacturing, as companies chased lower costs overseas, has fueled concern in Washington over the nation’s supply chain for the tiny electronic components that are the foundation of modern life.
Traditional semiconductors, known as legacy chips, are used in basically all modern electronics, from phones and computers to refrigerators and washing machines. More advanced chips are expected to power the next generation of advanced weapon systems and artificial intelligence software.
The United States pioneered the technology decades ago but has since lagged behind in the production of both types of chips, even as China’s capabilities have increased. Although US-based plants made 37 percent of the world’s chips in 1990, their share of production has dropped to about 12 percent.
Commerce Secretary Gina Raimondo said at a briefing Sunday that the CHIPS Act would be a “generation-at-a-time investment” to address the nation’s over-reliance on foreign manufacturers for chips critical to U.S. industry and defense. The domestic pipeline was designed to be safe.
Thomas Caulfield, chief executive of GlobalFoundries, said in a statement that the funding “will play an important role in making the US semiconductor ecosystem more globally competitive and resilient.” He added that the industry next needs to focus on “increasing demand for American-made chips, and growing our talented American semiconductor workforce.”
The Global Foundries grant is the largest grant announced as part of the Act. Since December, the administration has said it will pay $35 million to BAE Systems, a defense contractor that makes chips used in fighter jets, and $162 million to Microchip Technology, a company that makes memory chips and other mass-market electronics. Will build “microcontrollers” on fabs. in Colorado and Oregon. More awards will be announced in the coming weeks, officials said.
A worldwide chip shortage during the Covid pandemic has driven up car prices and shut down automotive plants. U.S. officials have also expressed concern about broader threats to the U.S. supply chain from China’s threats to attack Taiwan, the island where many of the world’s most advanced chips are made.
Today’s chips are made in closely controlled “clean rooms” by printing circuits on shiny, record-sized silicon wafers, a highly sophisticated process that relies on some of the world’s most advanced and expensive machines. Taiwan Semiconductor Manufacturing Co., or TSMC, the world’s largest chip maker, said it spent $30 billion on capital expenditures last year.
Global Foundry, whose Pentagon designation as a “trusted foundry” allows it to make advanced hardware for the military, has built Internet routers, radio towers and satellites, as well as the James Webb Space Telescope and the International Space Station. The chips used in the station are provided. . Its customers include automaker General Motors, defense contractor Lockheed Martin and electronics firm Qualcomm.
Of the five largest chipmakers in the world, GlobalFoundries is the only one based in the United States. The remaining four are based in China, South Korea and Taiwan.
GlobalFoundries applied for CHIPS Act subsidies last year, saying the support is necessary for the company to “continue to expand its U.S. manufacturing footprint.” The company will also take advantage of the law’s tax credit for advanced manufacturing investments, which the Congressional Budget Office estimates will be worth about $24 billion over the next decade.
The federally supported expansion will help GlobalFoundries’ campus in upstate New York, north of Albany, triple its capacity to 1 million wafers a year over the next decade, administration officials said. . The grant will also make the Burlington facility the first in the country to manufacture next-generation chips for electric vehicles and the power grid.
Fab 8 upgrade, Meanwhile, General Motors will expand its capacity to make automotive chips used by General Motors, which last year signed a deal with GlobalFoundries to supply specialty chips to the automaker. A car contains dozens of specialized chips that control a variety of features, from airbags, brakes and backup cameras to electric car motors and power seats.
In addition to the $1.5 billion grant, the Biden administration will provide Global Foundries with $1.6 billion in loans for construction and upgrades. The three projects are expected to total about $12.5 billion, including grants and private funding.
Administration officials did not give a timeline for construction. He said the money was committed as part of an initial agreement that would require a due diligence period before being officially awarded. It will be paid based on project milestones, as opposed to a lump sum.
The plans are expected to create about 1,500 manufacturing jobs and 9,000 construction opportunities, many of which will be centered around the new fab, officials said.
Chip manufacturers have complained that the costs of building a new fab — like the one TSMC is doing in Arizona — are higher in the United States than in Asia, increasing the need for public subsidies. They have also struggled with a shortage of trained American workers capable of performing critical tasks.
The administration said its funds will include about $10 million to support GlobalFoundries’ workforce development initiatives, including an apprenticeship program to teach trainees to work in fab, semiconductor No experience is required.
“It shows that our best days are not over,” Senate Majority Leader Charles E. Schumer, the New York Democrat whose state will benefit from the funds, said at a briefing Sunday. “We can compete, we can understand new changes and adapt to them quickly.”