The US has taken another step in strengthening its standing in the semiconductor industry by finalising a $1.5 billion subsidy to GlobalFoundries (GF) to expand its chip production in New York and Vermont, aiming to create 10,000 jobs. This is part of the CHIPS and Science Act, a $52.7 billion programme designed to grow domestic semiconductor manufacturing.
GlobalFoundries, one of the world’s largest contract chipmakers, plans to use this funding to upgrade its facilities to meet growing demand for chips used in cars, smart devices, data centres, and defence. The company is investing $13 billion over the next 10 years across its New York and Vermont sites. The funding will support the construction of a new state-of-the-art facility in New York, the expansion and modernisation of an existing site in New York, and the modernisation of its operations in Vermont. These investments aim to bolster supply chain resilience, advance US economic and national security, and onshore technologies crucial for defence and intelligence. The initiative is expected to create 9,000 construction jobs and 1,000 manufacturing jobs across the two states.
Shortages of semiconductors, like those produced by GF, caused major disruptions during the COVID-19 pandemic, leading to price increases and halts in production for goods such as automobiles and appliances. This funding supports GF as one of the four companies outside China with large-scale mature foundry capabilities, with GF being the only US-headquartered company among them.
Previous funding
Other semiconductor companies are also benefiting from the programme. Earlier this year, Taiwan Semiconductor Manufacturing Co. (TSMC) received $6.6 billion to build advanced chip fabs in Arizona. BAE Systems was awarded $35.5 million to modernise its facility in New Hampshire, allowing it to quadruple chip production for F-35 fighter jets and satellites, supporting US defence needs while reducing reliance on overseas suppliers. Rocket Lab was awarded $23.9 million to boost production of chips for jets, satellites, and spacecraft, as well as increase solar cell production by 50% over three years, which is critical for NASA and defence programmes.
The impact of investments
This surge in semiconductor investment is designed to reduce the US’s dependence on foreign-made chips, securing supply chains for industries like defence, aerospace, and automotive. By supporting companies like GlobalFoundries, BAE Systems, and Rocket Lab, the government aims to boost production capacity and ensure that critical technologies are made in America. The CHIPS for America programme has already distributed $10 billion in incentives funding, with investments across 20 states projected to create over 125,000 jobs. It is part of a broader strategy to revitalise US manufacturing and strengthen its technological edge.
