US President Joe Biden said, the government is providing $1.5 billion to GlobalFoundries a computer chip company to scale up its production in New York and Vermont.
The announcement is among the third award of direct financial support for a semiconductor company the Chips and Science Act, 2022. This law empowers the government to invest more than $52 billion to revive the manufacturing of computer chips in the US as well as advance R&D.
Commerce Secretary Gina Raimondo said on a telephonic interview, “The chips that GlobalFoundries will make in these new facilities are essential,” adding. “They power sophisticated military equipment, electric vehicles. They assure smartphones have the latest features, enable faster Internet connections for Americans.”
Other than the direct funding, the administration would also provide direct loans worth up to $1.6 billion, with a total addition of public and private investment expected to be around $12.5 billion.
The chip company will use the funding to pay for the construction the new chip factory in Malta, New York, along with increasing the production at its existing plant in Malta as pert of a strategic agreement with General Motors, and will revive its Vermont based plant.
The project is expected to generate 1500 secondary sector jobs and about 9000 construction jobs over the next 10 years. According to the terms of deal, $10 million would be dedicated to training the workers and GlobalFoundries will extent its $1000 annual subsidy for child support and child care services to construction workers.
Senate leader Chuck Schumer, D-N.Y., who has also announced the billion-dollar grant on X, was an architect of the law that enables the funding mechanism for the chipset factory, a technology that he said was as essential to the US economy and security.
Chips are an essential part for a wide range of products like laptops, mobiles, electric cars, home appliances and medical devices.
Schumer said during an interview that America could be vulnerable to disruptions like the covid-19 days, when auto plants were facing a shortage of chips to keep making EVs, the shortage caused an $240 billion dent in the economy, which awaken the lawmakers and industries to the country’s high dependence on foreign nations for semi-conductor chips.
12% of the worlds semiconductor chips are produced in the US and it heavily relies on the chips produced in Asia, today one company in Taiwan naming Taiwan Semiconductor Manufacturing Company (TSMC) supplies around 90% of the world’s most advanced computer chipset.
“The Democrats are going to do what it takes to see that other countries — China, Russia and others — don’t gain economic advantage over all of us,” Schumer said.
