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The money will help semiconductor giant GlobalFoundries build a large-scale manufacturing facility, known as a “fab,” at its headquarters in Malta, New York, to produce advanced chips not currently manufactured in the United States. The grant will also help the company expand another plant in Malta, known as Fab 8, and modernize a third factory in Burlington, Vermont.
The decades-long decline in U.S. chip manufacturing, as companies sought to cut costs abroad, has fueled concern in Washington about the country’s supply chain for the tiny electrical components that form the basis of life. modern.
Traditional semiconductors, known as legacy chips, are used in virtually all modern electronic devices, from phones and computers to refrigerators and washing machines. More advanced chips are expected to power next-generation weapons systems and the next generation of artificial intelligence software.
The United States pioneered this technology decades ago, but has since fallen behind in the production of both types of chips, even as China’s capabilities have soared. Although U.S.-based plants made 37 percent of the world’s chips in 1990, their share of production has fallen to about 12 percent.
Commerce Secretary Gina Raimondo, in a briefing on Sunday, said the Chip Act’s “once-in-a-generation investment” was designed to address the country’s overreliance on foreign manufacturers and ensure a local pipeline for chips. critical to American industry and defense.
The funding “will play an important role in making the U.S. semiconductor ecosystem more globally competitive and resilient,” GlobalFoundries CEO Thomas Caulfield said in a statement. He added that the industry must focus its attention on increasing demand for American-made chips and growing our talented American semiconductor workforce.
The GlobalFoundries grant is the largest announced as part of the law. Since December, the administration has said it would give $35 million to BAE Systems, a defense contractor that makes a chip used in fighter jets, and $162 million to Microchip Technology, a company that makes memory and other chips. microcontrollers” widely used in factories. in Colorado and Oregon. More awards will be announced in the coming weeks, officials said.
The global chip shortage during the Covid pandemic drove up car prices and shuttered auto plants. U.S. officials have also expressed fears about broader risks to the U.S. supply chain from China’s threats to invade Taiwan, the island where many of the world’s most advanced chips are made.
Today’s chips are built in tightly controlled “clean rooms” by printing circuits on record-sized shiny silicon wafers, a highly sophisticated process that relies on some of the most advanced and expensive machines in the world. The world’s largest chipmaker, Taiwan Semiconductor Manufacturing Co., or TSMC, saying It spent $30 billion on capital expenditures last year.
GlobalFoundries, whose “trusted foundry” designation by the Pentagon allows it to build high-end hardware for the military, has supplied the chips used in Internet routers, radio towers and satellites, as well as the James Webb Space Telescope and the International Space Station. . Its clients include automaker General Motors, defense contractor Lockheed Martin and electronics company Qualcomm.
Of the world’s five largest chipmakers, GlobalFoundries is the only one based in the United States. The other four are based in China, South Korea and Taiwan.
GlobalFoundries applied for the Chip Act subsidies last year, saying the support was necessary for the company to “continue to grow its U.S. manufacturing footprint.” The company will also benefit from the statute’s tax credit for investments in advanced manufacturing, which the Congressional Budget Office has estimated will be worth about $24 billion over the next decade.
The federally supported expansions will help GlobalFoundries’ campus in upstate New York, north of Albany, triple its capacity over the next decade, to 1 million wafers a year, administration officials said. The grant will also make the Burlington facility the first in the country to create a next-generation chip for electric vehicles and the electric grid.
The Fab 8 update, Meanwhile, it will expand capacity to build automotive chips used by General Motors, which signed a deal with GlobalFoundries last year giving the automaker an exclusive supply of chips. A single car contains dozens of specialized chips that control a variety of functions, from airbags, brakes and reversing cameras to electric car motors and electric seats.
Beyond the $1.5 billion grant, the Biden administration will make $1.6 billion in loans available to GlobalFoundries for construction and improvements. The three projects are expected to total about $12.5 billion, including grants and private financing.
Administration officials did not give a timeline for construction. The money, they said, is being committed as part of a preliminary agreement that will require a period of due diligence before it is officially awarded. It will be paid over time based on project milestones, rather than in a lump sum.
The projects are expected to create approximately 1,500 manufacturing jobs and 9,000 construction jobs, many of which will be centralized around the new factory, officials said.
Chipmakers have complained that the costs of building a new factory (as 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 and qualified American employees to do the delicate work.
The administration said its funding will include approximately $10 million to support GlobalFoundries’ workforce development measures, including an apprenticeship program to teach apprentices how to work in a factory, with no semiconductor experience required.
“This shows that our best days are not over,” Senate Majority Leader Charles E. Schumer, the New York Democrat whose state will benefit from the funding, said at a briefing Sunday. “We can compete, we can understand new changes and adapt quickly to them.”