The Biden administration has announced that it will provide $1.5 billion in funding to GlobalFoundries, a computer chip company, to expand its domestic production in New York and Vermont. This funding is part of the 2022 CHIPS and Science Act, which allows the government to invest over $52 billion in revitalizing computer chip manufacturing in the United States. The goal is to reduce the country’s dependence on foreign manufacturers for this crucial component.
Commerce Secretary Gina Raimondo emphasized the importance of the chips that GlobalFoundries will produce in these new facilities. These chips are essential for powering military equipment, electric vehicles, smartphones, and enabling faster internet connections for Americans. The funding will not only come in the form of direct financial support but also through loans worth up to $1.6 billion. When combined with public and private investment, the total amount is expected to reach approximately $12.5 billion.
GlobalFoundries plans to use the funding to construct a new advanced chip factory in Malta, New York, increase production at its existing plant in Malta as part of a strategic agreement with General Motors, and revitalize its plant in Burlington, Vermont. These projects are projected to create 1,500 manufacturing jobs and 9,000 construction jobs over the next decade.
In addition to job creation, the deal includes provisions for worker training and support services. $10 million will be dedicated to training workers, and GlobalFoundries will extend its existing $1,000 annual subsidy for child care and child care support services to construction workers. Senate Majority Leader Chuck Schumer, who played a key role in enabling the funding of chip factories, highlighted the importance of this technology for the U.S. economy and national security.
Schumer pointed out that the United States experienced disruptions during the coronavirus pandemic due to a shortage of chips, which cost the economy $240 billion. This shortage revealed the country’s heavy reliance on foreign manufacturers for this critical component. Currently, the U.S. produces only around 12% of the world’s supply, with the majority coming from Asia. Schumer emphasized the need to prevent other countries, such as China and Russia, from gaining an economic advantage over the United States.
The investment in computer chip production is seen as a key economic issue, especially with a major election approaching. Republicans have criticized the inflation rates that peaked in 2022, which have negatively impacted families’ buying power and affected President Joe Biden’s approval ratings. However, Democrats argue that their efforts to address inflation and make long-term investments in areas like computer chip production and infrastructure will drive future growth. Schumer believes that these investments demonstrate the Democrats’ commitment to investing in the country’s future.
Overall, the funding provided by the Biden administration to GlobalFoundries represents a significant step towards revitalizing domestic computer chip production. By reducing reliance on foreign manufacturers and creating jobs in this industry, the United States aims to strengthen its economy and national security. The investment aligns with the Democrats’ focus on long-term growth and demonstrates their commitment to securing a prosperous future for the American people.