Pure-play foundry GlobalFoundries (GF) is seeking to bring chip manufacturing back to the U.S. with a new plan to invest $16 billion in reshoring and expansion of its semiconductor manufacturing facilities in New York and Vermont.
Reshoring and investment are a response to the growth in artificial intelligence (AI) and the demand for next-generation semiconductors that can improve performance across data centers, communications infrastructure and AI-enabled devices.
GF said it will work with the Trump Administration and technology companies on reshoring critical components of the semiconductor supply chain back to America. Some of the companies involved include:
- Apple
- SpaceX
- AMD
- Qualcomm Technologies Inc.
- NXP Semiconductors
- General Motors
These companies are committed to reshoring semiconductor production to the U.S. and diversifying supply chains, GF said.
“The AI revolution is driving strong, durable demand for GF’s technologies that enable tomorrow’s datacenters — including GF’s leading silicon photonics, as well as GaN for power applications,” said Tim Breen, CEO of GF. “Meanwhile at the edge, GF’s proprietary FDX technology is uniquely positioned to support AI functionality with low power consumption. With all these technologies and more manufactured right here in the U.S., GF is proud to play its part in accelerating America’s semiconductor leadership.”
New investment
GF said the new investment will build upon the company’s previous expansion plans, including the more than $13 billion to expand and modernize its New York and Vermont facilities as well as its New York Advanced Packaging and Photonics Center.
GF said it is also committing an additional $3 billion that includes advanced R&D initiatives focused on:
- Packaging innovation
- Silicon photonics
- Next-generation GaN technologies
The investment will represent $16 billion in U.S. semiconductor investments that will be designed to help applications like AI, aerospace, automotive and high-performance communications.
GF received up to $1.5 billion as part of the CHIPS and Science Act that was initiated under the Biden Administration. The funding was designed for three projects: Expansion of GF’s Malta, New York, fab; construction of a new state-of-the-art fab in Malta, New York; and upgrade an existing Essex Junction, Vermont, facility.
Why it matters
Since COVID-19, the U.S. has been embarked on an effort to bring back semiconductor manufacturing domestically. This was partially in response to the major chip shortage that the pandemic caused but also partially because COVID showed how aggregating chip manufacturing in a few geographic locations — specifically Taiwan, Korea and China — could be devastating to the supply chain if a geopolitical issue emerges or natural disaster or even a future pandemic occurs.
The idea is that if the semiconductor supply chain is more diversified, it will be more resilient and better able to withstand these types of issues. Also, the fact that more revenue will be generated by reshoring chip manufacturing in the U.S. isn’t a bad thing either.
The CHIPS and Science Act was the first major law to start direct funding for these types of semiconductor manufacturing reshoring efforts, including new fabs being constructed by TSMC, GF, Samsung, Micron, TI, Intel and more in the U.S.
While the Trump Administration is renegotiating some of the CHIPS Act funding, the reshoring of semiconductor manufacturing is continuing.
