Computer chip company GlobalFoundries has received a $1.5 billion package from the Biden administration to expand their production in the US. The company is the first to receive funding of this amount from the CHIPS and Science Act. It will use the investment to expand its New York facility and modernize its manufacturing in Vermont.
About GlobalFoundries
A multinational company, GlobalFoundries was created in 2009 and is headquartered in Malta, New York. They host manufacturing sites in Singapore, Europe, and the United States. In the US, they own two manufacturing facilities, one in New York and one in Vermont, where they are the largest private employer in the area. Another four US locations across the country serve as Design Centers, regional offices, and Research & Development.
In 2023, GlobalFoundries was ranked the third-largest semiconductor foundry in the world by revenue. Last year, they pulled in over $1.8 billion, and they currently have about 13,000 employees worldwide. What could be this lucrative of a business? Chip manufacturing.
American Chip Manufacturing
A “chip” is a simple term for something very technologically advanced. Computer chips are small electrical conductive materials used mainly as memory storage for modern computers. You can find them in everything from your smartphone to home appliances and even aircraft. If it’s electronic, it’s got a chip. To say the least, they are very important in our current age of technology.
It’s a tricky business to manufacture chips. The methods are extremely detailed and precise. Chips must be built in a clean room, which is a very controlled sterile environment, highly filtered for dust, microbes, and other microscopic air particles. Expectedly, chip manufacturing is expensive.
As of the most recent data, the majority of chips are produced out of Taiwan. The United States ranks fourth, just one step in front of China. In 2021, it was calculated that the United States manufactured about 12% of the global chip supply. This is a drastic decrease from owning 37% of the supply in the 1990s.
When the COVID-19 pandemic hit in 2020, the production of chips decelerated to a mere crawl. Due to this manufacturing mayhem, and America’s low output of chips, the government has found new interest in revitalizing this field on US soil.
The Investment
The investment comes on the coattails of the CHIPS and Science Act. Under this law, passed in 2022, the government received an allowance of over $52 billion to reinvest in the American computer chip manufacturing sector. The bill aims to reinvigorate the field of science and engineering in the US to ensure the nation remains a global leader in the area and avoid repeating the supply chain kerfuffle of 2020.
GlobalFoundries is the most recent recipient of a bite of this pie. On 19 February 2024, the US Department of Commerce announced a funding package of $1.5 billion for the company. GlobalFoundries will use this investment to expand their US manufacturing facilities, matching a growing chip demand, and upgrade their equipment to higher-volume capabilities.
Going Forward
It’s expected that the semiconductor market will double over the next 10 years. On top of this boost from the government, GlobalFoundries plans to invest over $12 billion in the US sites over the next decade. From all of this funding will come 1,500 new manufacturing jobs at GlobalFoundries and 9,000 new construction jobs to support the expansion.
These investments in GlobalFoundries’ American manufacturing capabilities are integral in ensuring that the United States keeps up with the technology race.
Image credit: GlobalFoundries
