Biden admin providing $1.5 billion to GlobalFoundries to make computer chips in New York and Vermont
WASHINGTON — The Biden administration said Monday that the government plans to provide $1.5 billion to computer chip company GlobalFoundries to expand its domestic manufacturing in New York and Vermont.
The announcement marks the third direct financial support to a semiconductor company under the CHIPS and Science Act of 2022. The law allows the government to invest more than $52 billion to revive computer chip manufacturing in the United States and promote research and development.
“The chips that GlobalFoundries will make in these new facilities are essential,” Commerce Secretary Gina Raimondo said on a call with reporters. “They power advanced military equipment, electric vehicles. They ensure that smartphones have the latest features and enable faster internet connections for Americans.”
In addition to the direct financing, the government would also provide loans worth up to $1.6 billion, with the total combination of public and private investments expected to be around $12.5 billion.
GlobalFoundries plans to use the financing to help pay for the construction of a new advanced chip factory in Malta, New York, increase production at its existing factory in Malta as part of a strategic agreement with General Motors, and the Burlington factory , to revive Vermont. .
The projects are expected to create 1,500 manufacturing jobs and 9,000 construction jobs over the next ten years. As part of the agreement, $10 million would be spent on training workers and GlobalFoundries will expand its existing $1,000 annual subsidy for childcare and childcare support services to construction workers.
Senate Majority Leader Chuck Schumer, DY, was an architect of the law that would allow funding for chip factories, a technology he says is as essential to the U.S. economy and national security as food. He said in an interview with The Associated Press that the United States could be vulnerable to disruptions such as during the coronavirus pandemic, when auto factories didn’t have enough chips to keep making vehicles.
“The Democrats are going to do whatever it takes to ensure that other countries — China, Russia and others — don’t gain an economic advantage over all of us,” Schumer said.
With a major election this year that puts control of the White House and Congress at stake, the health of the U.S. economy is a serious concern. Republican lawmakers have emphasized that inflation rates that peaked in 2022 have damaged household purchasing power, an immediate pressure point that has damaged President Joe Biden’s approval rating.
But Democrats have emphasized their efforts to reduce inflation and the long-term investments they say will boost growth, such as investments in computer chip manufacturing and infrastructure.
Schumer also said these investments — which enjoyed some level of bipartisan support — reflected Democrats’ emphasis on investing in the nation’s investments in ways that could potentially pay off for decades to come.
“People want to see that we have a future,” Schumer said. “It makes a huge impression on the American people.”