The US government has allocated $1.5 billion in subsidies to GlobalFoundries, the world’s third-largest contract chipmaker, to support semiconductor manufacturing. This substantial funding is part of a $39 billion fund approved by Congress in 2022 to strengthen domestic chip production.
Under the agreement with the Commerce Department, GlobalFoundries plans to build a new semiconductor production facility in Malta, New York, while also expanding its operations in Malta and Burlington, Vermont. This initiative aims to enhance chip production capabilities within the United States and ensure a steady supply for critical industries.
Commerce Secretary Gina Raimondo highlighted the importance of these chips in national security, as they are utilized in satellite communications, defense systems, automotive safety features, and connectivity technologies. This investment will not only strengthen the country’s semiconductor capabilities but also bolster the US semiconductor workforce.
The expansion in Malta is particularly significant for the automotive industry, as it will provide a stable chip supply for manufacturers like General Motors. GlobalFoundries recently forged a long-term deal with General Motors to address chip shortages, emphasizing the strategic value of domestic chip production in supporting automotive innovation.
In addition to the grant, $1.6 billion in loans will be made available, facilitating a total investment of $12.5 billion across New York and Vermont. This funding will help attract other semiconductor companies to set up or expand their operations within the United States.
According to Raimondo, the new facility in Malta will focus on producing high-value chips that are currently not manufactured within the country. This initiative will further reinforce the nation’s semiconductor capabilities and reduce reliance on overseas chip suppliers.
The US government is actively engaged in discussions with other potential applicants, and further announcements are expected by the end of March. These efforts align with global trends, where countries are striving to strengthen their semiconductor industries for economic and strategic reasons.
Frequently Asked Questions (FAQs)
1. What is the purpose of the $1.5 billion subsidy to GlobalFoundries?
– The subsidy is intended to support semiconductor manufacturing and strengthen domestic chip production in the United States.
2. How much funding was approved by Congress for chip production?
– Congress approved a $39 billion fund to support domestic chip production in 2022.
3. Where does GlobalFoundries plan to build a new semiconductor production facility?
– GlobalFoundries plans to build a new facility in Malta, New York, while also expanding its operations in Malta and Burlington, Vermont.
4. What industries rely on chips for their operations?
– Chips are crucial for industries such as satellite communications, defense systems, automotive safety features, and connectivity technologies.
5. What is the strategic value of domestic chip production for the automotive industry?
– Domestic chip production provides a stable chip supply for manufacturers like General Motors and supports automotive innovation.
6. How much investment will be facilitated by the grant and loans?
– The grant and loans will facilitate a total investment of $12.5 billion across New York and Vermont.
7. What types of chips will the new facility in Malta focus on producing?
– The new facility in Malta will focus on producing high-value chips that are currently not manufactured within the country.
8. Why is reducing reliance on overseas chip suppliers important?
– Reducing reliance on overseas chip suppliers helps reinforce the nation’s semiconductor capabilities and reduces the risk of supply shortages.
Key Terms
– Subsidies: Support or financial assistance provided by the government to help an industry or company.
– Semiconductors: Electronic components that are the foundation of modern electronics and devices.
– Chipmaker: A company that designs, manufactures, and sells semiconductor chips.
– Funding: Money provided for a specific purpose or project.
– Domestic: Pertaining to or related to one’s own country.
Related Links
– U.S. Department of Commerce
– GlobalFoundries
– General Motors
– Congress
The source of the article is from the blog agogs.sk