Recently, the US Department of Commerce officially announced that it will provide GlobalFoundries(GF or GloFo), a world-renowned semiconductor foundry, with $1.5 billion in funding to support its semiconductor expansion plans in the United States. This decision signifies the US government's determination to strengthen the domestic semiconductor manufacturing industry and also injects strong momentum into GlobalFoundries' future development.

Details of the Funding

The funding is part of the reward agreement reached under the CHIPS and Science Act, with GlobalFoundries set to receive $1.5 billion in direct funding to expand its semiconductor production capabilities in the United States. Notably, the disbursement of the funding will be determined based on the specific progress of GF in achieving project milestones, ensuring the effective use of funds.

GF' President and CEO, Dr. Thomas Caulfield, stated, "The idea of strengthening the US semiconductor manufacturing industry has been brewing for over five years. With government support, this idea has evolved into the CHIPS and Science Act. GloFo' foundational chips are at the core of the US economy, supply chain, and national security. We are extremely grateful for the support and funding from the US government, as well as New York and Vermont, and we will use this support to ensure that our clients have the American-made chips they need for success and victory."

Expansion Plans

According to GF' plan, this funding will support its investment of $13 billion in capacity expansion in the United States over the next decade and more. The expansion plan is expected to create approximately 1,000 manufacturing jobs and 9,000 construction jobs, providing momentum for the long-term growth of the US economy and job creation.

GloFo plans to build a new large-scale 12-inch wafer fab in Malta, New York, to fill the gap in high-value technology in the United States. At the same time, GloFo will also expand its existing manufacturing facility in Malta, New York, to increase the production capacity of automotive semiconductors. These two projects will share a subsidy of $1.375 billion.

In addition, GF will implement a revitalization plan at its existing wafer fab in Burlington, Vermont, which will receive a subsidy of $125 million. GF will commercialize 8-inch silicon-based gallium nitride (GaN) manufacturing technology locally, building the first large-scale production facility of its kind in the United States to support the development of key areas such as electric vehicles, power grids, 5G, and 6G smartphones.

US Commerce Secretary Gina Raimondo stated that GloFo' expansion plan will ensure stable chip supply for automakers, including General Motors, preventing supply chain issues. She also revealed that the US Department of Commerce is working hard to reach final agreements with more semiconductor factories under the CHIPS and Science program before the end of the Biden administration. Previously, the US Department of Commerce had provided TSMC's US subsidiary with $6.6 billion in government funding.

Technical and Market Impact

GF' expansion plan will not only enhance the competitiveness of the United States in the global semiconductor industry but also provide important support for the long-term growth of the US economy and job creation. As a specialized semiconductor foundry, GF focuses on specialty process innovation, and its chips are widely used in the automotive, communications, and defense sectors. The implementation of this expansion plan will help ensure stable chip supply for the United States in these key areas and promote the development of related industries.

Conclusion

The $1.5 billion in funding received by GlobalFoundries is a reflection of the US government's strategic determination to reshape the domestic high-tech industry chain, aiming to enhance the R&D capabilities and production scale of domestic enterprises in cutting-edge technologies, reduce dependence on external supply chains, and safeguard national security interests. With the implementation of the expansion plan, GloFo will further enhance its competitiveness in the US and global semiconductor industries, making a significant contribution to the long-term growth of the US economy and job creation.

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