https://www.syracuse.com/business/2024/02/globalfoundries-wins-31-billion-in-chips-act-subsidies-for-upstate-ny-vermont-expansion.html Skip to Article Set weather Back To Main MenuClose Customize Your Weather Set Your Location: Enter City and State or Zip Code [ ]Submit syracuse's Logosyracuse's Logo Subscribe Presidents Day Sale - 50% Off - Expires 2/20/24 1. Business GlobalFoundries wins $3.1 billion in CHIPS Act subsidies for Upstate NY, Vermont expansion * Updated: Feb. 19, 2024, 9:36 a.m.| * Published: Feb. 19, 2024, 5:00 a.m. GlobalFoundries in Malta, NY An aerial view of the GlobalFoundries computer chip plant in Malta, N.Y. The company wants to triple its production capacity by building a second plant.GlobalFoundries photo * * * * Subscribers can gift articles to anyone By * Mark Weiner | mweiner@syracuse.com GlobalFoundries would receive $3.1 billion in federal grants and loans to expand its Upstate New York computer chip plant and modernize a factory in Vermont, according to a preliminary deal the White House plans to announce today. The massive package of subsidies would be the largest award to date to a manufacturer competing for aid from the $52 billion federal CHIPS and Science Act. GlobalFoundries would receive $1.5 billion in grants and $1.6 billion in federal loans under a preliminary, non-binding agreement, according to the U.S. Commerce Department. In return for the subsidies, GlobalFoundries said it would invest about $12.5 billion in the projects, most of which would be spent to expand the company's Fab 8 in Malta, in Saratoga County. The big subsidies for GlobalFoundries offer a preview to the kind of announcement that President Joe Biden's administration is expected to make soon for Micron Technology, which plans to build a much larger complex of computer chip plants in Central New York. The GlobalFoundries expansion would create up to 1,500 manufacturing jobs and 9,000 construction jobs over the next 10 years, federal officials said. Most of the new jobs would be created in Upstate New York, where GlobalFoundries is building a new plant to triple production capacity, said U.S. Sen. Charles Schumer, D-N.Y. The jobs would be on top of the 2,500 at the company's existing plant in Malta, he said. GlobalFoundries is one of only four companies in the world outside of China - and the only one in the United States - with the capacity to operate large-scale foundries that produce semiconductors used in both consumer and military applications. The Saratoga County plant produces chips considered vital to national security, supplying more than 200 customers. GlobalFoundries has signed a long-term deal to produce chips at its Upstate New York campus for Lockheed Martin, the nation's largest defense contractor. The plant also has a long-term agreement to supply chips to General Motors for its cars and trucks. "This is a huge day for not just Upstate New York and the Capital region and New York state, but for America as well," Schumer said in a White House conference call with reporters. "By doing this, we will never have the kind of (chip) shortages we once had." U.S. Commerce Secretary Gina Raimondo said the Saratoga County plant will make "high-value chips" that are currently not made in the United States. The 300-millimeter chips are essential for national security because U.S. defense companies and auto manufacturers have no other domestic sources, Raimondo said during the call with reporters. "I can't emphasize how important this is," she said. "As we all remember, very recently during the pandemic we faced a shortage of chips, which led to shutdowns and layoffs and furloughs of thousands of hard-working Americans in auto manufacturing sites all across the country." As part of today's agreement, GlobalFoundries would receive a $10 million grant to expand a workforce development program in Saratoga County for manufacturing and construction workers, a Commerce Department official said. Schumer said the deal includes a commitment from GlobalFoundries to continue to provide a $1,000-per-employee annual subsidy for childcare and to extend the benefit to construction workers who build the new plant. The massive financial deal is a milestone in the CHIPS program that could provide clues as to how a deal would be structured between Micron Technology and the federal government for a complex of chip plants in Central New York. Micron applied to the U.S. Department of Commerce in August for subsidies to support construction of up to four manufacturing plants at White Pine Commerce Park in the town of Clay. Micron said it would invest up to $100 billion in the plants over 20 years, creating up to 9,000 direct jobs and up to 40,000 more construction and spinoff jobs in other industries. If GlobalFoundries receives a $1.5 billion federal grant for a roughly $12 billion investment, Micron might expect subsidies totaling at least $10 billion for its $100 billion project if the same percentages are applied. Those subsidies are expected to come as federal grants, loans and loan guarantees. Other big semiconductor companies could be in line for similar financial incentive packages. Intel, which plans to invest up to $100 billion in an Ohio project similar to Micron's in Central New York, is negotiating with federal officials on a deal for $10 billion in loans and grants, Bloomberg reported Friday, citing sources it did not identify. Separately, the Treasury Department is in the process of establishing rules for the companies to apply for a 25% investment tax credit. The tax credit would apply to construction and equipment costs. Under the CHIPS and Science Act authored by Schumer, the Senate majority leader, the limit for grants is $3 billion per project. But those limits could be waived by President Biden if officials determine the project is essential for national security. Micron and Commerce Department officials have declined to discuss the status of secret negotiations over the company's application. Raimondo said earlier this month that she expects her department to announce several large CHIPS grant awards over the next six to eight weeks. The grants for GlobalFoundries would come from a separate $2 billion fund in the CHIPS Act set aside for legacy chips, older generation computer chips used in large quantities in autos, airplanes, home appliances and other consumer electronics. Micron makes leading-edge or cutting-edge memory chips that are more sophisticated and used in smartphones, data centers, quantum computing and artificial intelligence applications. The CHIPS and Science Act set aside $39 billion in subsidies for leading-edge chip subsidies. Other leading-edge chip makers include Intel, Samsung and Taiwan Semiconductor Manufacturing Co. - all of which have committed to building new plants in the United States. All told, the Commerce Department says it is negotiating with about 160 large companies who have applied for grants and loans. An additional 600 companies have submitted statements of interest in CHIPS funding. Schumer said he wrote the CHIPS and Science Act with the idea of transforming Upstate New York into a global hub for semiconductor manufacturing, research and development. A series of chips projects are underway in the Thruway corridor stretching from Albany to Buffalo. Some industry officials have complained about the slow pace of the negotiations for federal subsidies. Until today, only two companies had struck preliminary deals for smaller amounts of CHIPS Act money. BAE Systems would receive up to $35 million in incentives to modernize its plant in New Hampshire. Separately, Microchip Technology Inc. agreed to a deal for about $162 million in subsidies to support expansions of plants in Colorado and Oregon. Earlier this month, Intel said it would delay construction on the $20 billion chip manufacturing plant it started to build near Columbus, Ohio. Intel blamed the decision on slowing demand for its chips and delays in securing federal grants from the CHIPS Act. The company is building the first two of its four planned chip plants near Columbus. Read more about Micron Technology in Clay * Granting tax breaks for all housing is irresponsible public stewardship (Your Letters) * Proposal to expand tax breaks for new housing in Onondaga County receives pushback * Micron offering paid summer internships for Central NY college students * Cost to build sewer line in Clay more than doubles - and it's not because of Micron * China's open-source chips threaten US semiconductor push (Guest Opinion by David Paterson) Got a tip, comment or story idea? Contact Mark Weiner anytime by: Email | Twitter | Facebook | 571-970-3751 If you purchase a product or register for an account through a link on our site, we may receive compensation. 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