The U.S. Department of Commerce recently announced that it will provide $1.5 billion in subsidies to GlobalFoundries to support its semiconductor expansion plans in the United States. This decision reflects the US government's determination to strengthen the domestic semiconductor manufacturing industry.

On Wednesday (20th) local time, GF and the US Department of Commerce jointly announced that the two sides reached an incentive agreement on the CHIPS and Science Act, reflecting the US government's determination to strengthen the domestic semiconductor manufacturing industry.

Gf will receive $1.5 billion in direct funding to support its semiconductor expansion plans in the United States. But subsidies will be awarded based on the completion of project milestones.

"The idea to strengthen U.S. semiconductor manufacturing has been in the works for more than five years," said Dr. Thomas Caulfield, President and CEO of GF. With the support of the government, this idea evolved into the CHIPS and Science Act. Gf's essential chips are at the heart of the U.S. economy, supply chain and national security. We greatly appreciate the support and funding from the U.S. government and the states of New York and Vermont, which we will use to ensure our customers have the American-made chips they need to succeed and win."

U.S. Commerce Secretary Gina Raimondo revealed that the department is working to reach more final agreements with semiconductor plants in the Chip and Science program before the end of the Biden administration. Previously, the U.S. Department of Commerce had provided $6.6 billion in government aid to TSMC's U.S. unit.

Gf pledged in preliminary contracts announced in February to invest $13 billion in its U.S. manufacturing base over the next decade to support key end markets such as automotive, smart mobile devices, Internet of Things (IoT), data centers, and aerospace and defense. The contract is now legally binding.

The grants will support GF's $13 billion investment plan in the United States over the next decade and are expected to create approximately 1,000 manufacturing jobs and 9,000 construction jobs. The company plans to build a large new 12-inch wafer fab in Malta, New York, to fill a gap in high-value technology in the United States, and expand an existing manufacturing facility in Malta, New York, to increase automotive semiconductor capacity. The two projects will share $1.375 billion in subsidies.

In addition, an additional $125 million in subsidies will support GF's existing fab revitalization program in Burlington, Vermont. Gf will commercialize its 8-inch silicon-based gallium nitride (GaN) manufacturing technology locally, building the first large-scale mass production facility of its kind in the United States to support technology development in key areas such as electric vehicles, power grids, 5G and 6G smartphones. This investment plan will not only enhance U.S. competitiveness in the global semiconductor industry, but will also fuel long-term U.S. economic growth and job creation.

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