GlobalFoundries gets $1.5 billion subsidy from U.S. gov’t after it was fined for violating export laws to China

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GlobalFoundries gets $1.5 billion subsidy from U.S. gov’t after it was fined for violating export laws to China

GlobalFoundries (GF) has been 

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 up to $1.5 billion under the CHIPS and Science Act to expand its U.S. semiconductor manufacturing operations. The funding will be part of the company’s $13 billion investment plan to expand production capacity at its two U.S. sites over a decade. The U.S. government signed a deal with GF after the company was fined $500 million for violating U.S. export rules, as 

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“GF’s essential chips are at the core of U.S. economic, supply chain and national security,” said Dr. Thomas Caulfield, president and CEO of GF. “We greatly appreciate the support and funding from both the U.S. Government and the states of New York and Vermont, which we will use to ensure our customers have the *********-made chips they need to succeed and win.”

GF will use the funding for three major projects. The first is expanding its Fab 1 facility in Malta, New York, by installing new tools and porting various technologies from its global sites in Singapore and Germany. This will ensure a reliable supply of domestically produced chips for the U.S. automotive sector.

The second project aims to upgrade GF’s Essex Junction, Vermont, fab. The modernization will boost the capacity to produce next-generation gallium nitride (GaN) semiconductors for electric vehicles, data centers, IoT devices, and smartphones.

The third initiative involves constructing another cleanroom module at Fab 1 in Malta, New York. This new facility will manufacture chips for diverse markets, including AI, aerospace, and defense. Over the next decade, this expansion is expected to triple the campus’s chip production capacity.

The combined projects will create nearly 1,000 manufacturing jobs and over 9,000 construction roles. The investment also includes $550 million from New York State’s Green CHIPS Program and contributions from Vermont, GF’s partners, and strategic customers.

GF’s facilities in New York and Vermont are accredited under the Trusted Foundry program, ensuring secure chip manufacturing to meet the requirements of the U.S. Department of Defense and various agencies. This highlights GF’s important role in domestic chip supply.

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“By investing in GF’s domestic manufacturing capabilities, we are helping to secure a stable domestic supply of chips that are found in everything from home electronics to advanced weapons systems,” 

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 U.S. Secretary of Commerce Gina Raimondo. “Thanks to President Biden’s leadership and because of CHIPS for America, we are strategically strengthening every part of the semiconductor supply chain to ensure we meet our national security objectives and can out-compete and out-innovate the rest of the world.”

It is noteworthy that recently the U.S. Commerce Department fined GlobalFoundries $500,000 for sending $17.1 million worth of chips to SJ Semiconductor, an affiliate of blacklisted ******** chipmaker SMIC, without obtaining the required license, reports 

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GlobalFoundries attributed the violation to a data-entry error made before the blacklisting and highlighted its commitment to maintaining a solid trade compliance program. The company voluntarily disclosed the issue and worked with authorities, earning acknowledgment for its cooperation.

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