GlobalFoundries Inc. has received $1.5 billion in U.S. government funding to build a new fab and upgrade two existing chip manufacturing facilities.

The company announced the grant today. The funds will be provided through the CHIPS and Science Act, which allocates $52.7 billion worth of subsidies to the semiconductor sector. Intel Corp., which plans to spend more than $30 billion on a set of new U.S. fabs., is also expected to receive financing under the legislation.

GlobalFoundries operates a chip plant in Essex Junction, Vermont where it reportedly employed over 2,000 workers as of early 2022. The company will use a portion of its new $1.5 billion grant to expand the fab’s capacity. Additionally, it plans to turn the plant into the first U.S. facility capable of producing gallium nitride chips in large volumes.

The electrons in an atom orbit its nucleus at different distances. The difference between those distances is known as the bandgap. Gallium nitride has a wider bandgap than silicon, a property that allows chips based on the former material to operate at much higher voltages than a standard processor. Such chips are also better at withstanding heat. 

Because of their toughness, gallium nitride semiconductors are used in the auto sector to power electric vehicles’ charging components. They’re also found in certain other car subsystems. Beyond the auto sector, GlobalFoundries says that gallium nitride chips from its Vermont fab will be suitable for use in demanding environments such as electrical grids and data centers. 

Powering wireless networking equipment is another use case for the technology. Wireless networking systems such as cell towers include a power amplifier, a component that strengthens the outgoing signal to make connections more reliable. Amplifiers operate at fairly high voltages, which is why the chips that power them are often made of gallium nitride chips rather than silicon.

The $1.5 billion in funding GlobalFoundries has received will also finance two other fab projects. Both focus on its existing manufacturing campus in Malta, New York, which reportedly has capacity to make over 400,000 wafers’ worth of chips per year.

GlobalFoundries said that it will equip the facility with “critical technologies” already deployed at its plants in Singapore and Germany. The upgrade, the company detailed, will focus primarily on addressing the requirements of auto sector customers. The auto sector accounted for 17% of GlobalFoundries’ revenue last quarter, up from 5% a year earlier.

The third project detailed by the company today will see it build a second fab on the campus that hosts its Malta plant. The new facility will make chips for multiple markets including the automotive, aerospace, defense and artificial intelligence segments. GlobalFoundries said it has a “fast and efficient path from construction to production” because the Malta campus already houses the infrastructure necessary to support a fab.

Once construction is complete, the company’s two plants in New York are expected to have a combined production capacity of 1 million wafers per year. That’s nearly half the number of wafers GlobalFoundries currently processes annually across its entire manufacturing network. Over the next decade or so, the company intends to triple the capacity of the Malta campus.

Alongside the $1.5 billion in direct funding GlobalFoundries has secured for the projects, it will receive access to $1.6 billion worth of loans. The company estimates that the planned investments will create 1,500 manufacturing jobs and 9,000 construction jobs.

“These proposed investments, along with the investment tax credit (ITC) for semiconductor manufacturing, are central to the next chapter of the GlobalFoundries story and our industry,” said GlobalFoundries Chief Executive Officer Thomas Caulfield. “They will also play an important role in making the U.S. semiconductor ecosystem more globally competitive and resilient and cements the New York Capital Region as a global semiconductor hub.”

Intel is also expected to receive CHIPS Act financing for the new fabs it’s currently building in the U.S. Over the weekend, Bloomberg reported that the chipmaker is seeking more than $10 billion in grants and loans. Intel is planning to announce news on its foundry business Wednesday. More than 100 other semiconductor industry players have also applied for CHIPS ACT Funding. 

Photo: GlobalFoundries