Billions Start Flowing to Chip Makers For New U.S. Factories
The U.S. government is giving chip maker GlobalFoundries $1.5 billion in grants to build and expand facilities in New York and Vermont, the first major award in a program that aims to reinvigorate domestic chip production. The award from the Commerce Department kicks off what is expected to be a series of cash injections into semiconductor manufacturing projects in Arizona, Texas, New York and Ohio in the coming weeks.
Chip makers Intel, Taiwan Semiconductor Manufacturing, Samsung Electronics and Micron Technology have all submitted applications for the government to cover a portion of the billions of dollars it costs to build cutting-edge factories. The GlobalFoundries award announced Monday is contingent on a round of due diligence before a final agreement is reached. The money will be released in stages as the projects reach construction and production milestones.
“The domestic production of these chips will provide more supply chain stability to the auto and aerospace industries across the United States that currently rely on the shipment of these chips from overseas," Vice President Kamala Harris said. The grants, which have been under negotiation for months, are a cornerstone of the $53 billion Chips Act. The 2022 act, pushed by the Biden administration and a bipartisan group of lawmakers, outlined new investments in chip research and production after the U.S.’s share of global chip manufacturing dwindled to around 12% in 2020, from 37% in 1990.
The effort dovetails with a growing urgency among governments, manufacturers and chip users worldwide to shore up the chip-making industry. Chips are now seen as crucial resources that have national-security implications, similar to oil. “During the pandemic, we faced a
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