November 22, 2024 /SemiMedia/ — GlobalFoundries announced it will receive $1.5 billion in subsidies under the U.S. CHIPS Act to support its expansion projects in Vermont and New York. The funding is a key component of the U.S. government’s efforts to strengthen domestic semiconductor manufacturing.

Under the agreement, the funds will be distributed in phases to support the expansion of two facilities and the construction of a new plant, with a total investment exceeding $13 billion. These projects are expected to create nearly 1,000 production jobs and employ 9,000 construction workers.

New York Governor Kathy Hochul said the new facility would bring high-paying jobs to the state and bolster its role in semiconductor manufacturing. “A quarter of all chips made in the U.S. will be produced within 350 miles of Upstate New York,” Hochul added.

In addition to federal subsidies, GlobalFoundries will receive $550 million in tax credits from New York State and additional funding from Vermont. Companies applying for CHIPS Act subsidies are required to secure state-level support.

“By investing in GlobalFoundries’ domestic manufacturing capabilities, we are ensuring a stable domestic supply of chips for everything from consumer electronics to advanced weapons systems,” U.S. Commerce Secretary Gina Raimondo said in a statement.

GlobalFoundries noted that the final agreement excludes an initially proposed $1.6 billion CHIPS Act loan, as the company determined it did not require the funds. “We have sufficient capital and liquidity to fund our U.S. expansion plans,” the company said in a statement.