The Biden administration announced a preliminary agreement Monday to provide $1.5 billion in funding through the CHIPS and Science Act to a New York-based company in an effort to bolster domestic production of semiconductor chips.
The Commerce Department said it signed a nonbinding preliminary memorandum of terms with GlobalFoundries to give funding through the bipartisan legislation President Biden signed into law in 2022. The money would be used for a new facility, expansion of production capacity and the modernization of GlobalFoundries's semiconductor manufacturing sites in New York and Vermont.
The company produces chips that are used for blind spot detection and collision warnings in cars, for charging in smartphones and to secure Wi-Fi connections. Part of the funding would specifically be used to expand a facility that houses a dedicated corridor for General Motors.
“President Biden and I continue to be fully committed to growing our economy and creating opportunity in every part of America. Today’s announcement is another way in which we are delivering on that commitment in New York, Vermont, and communities throughout the country," Vice President Harris said in a statement.
Thomas Caulfield, president and CEO of GlobalFoundries, said the investments through the CHIPS and Science Act "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."
"With new onshore capacity and technology on the horizon, as an industry we now need to turn our attention to increasing the demand for U.S.-made chips, and to growing our talented U.S. semiconductor workforce," Caulfield said in a statement.
Biden has repeatedly touted the importance of the CHIPS and Science Act, citing the prevalence of microchips that are used in everyday technology such as phones, cars, home appliances and more. Officials have said the law is critical to bolster domestic production of the chips to make the U.S. less reliant on foreign supply chains.
The Biden administration had previously reached a deal with BAE Systems Inc. to provide $35 million in funding through the law for the company’s defense projects.
And in January, the administration announced $162 million in funding to boost production in Oregon and Colorado.