Saratoga County

Computer chip factory subsidy advances; Malta’s GlobalFoundries among potential beneficiaries

From left, U.S. Senate Majority Leader Charles Schumer, D-N.Y., GlobalFoundries CEO Tom Caulfield, and U.S. Secretary of Commerce Gina Raimondo pose at GlobalFoundries Fab 8 in Malta on July 19, 2021.
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From left, U.S. Senate Majority Leader Charles Schumer, D-N.Y., GlobalFoundries CEO Tom Caulfield, and U.S. Secretary of Commerce Gina Raimondo pose at GlobalFoundries Fab 8 in Malta on July 19, 2021.

WASHINGTON, D.C. The U.S. Senate on Wednesday approved a $52 billion boost for the semiconductor industry, a major step forward in a multiyear effort to increase the production of computer chips on American soil.

Multiple current and future operations in upstate New York are expected to benefit if, as expected, the House of Representatives also approves the legislation and sends it to President Joe Biden, who has indicated support.

Among them is GlobalFoundries, which operates a chip factory co-located with its headquarters in Malta and has said it will build a second chip fab on adjacent land if product demand continues and if state and federal financial assistance is offered.

After Wednesday’s vote, a spokeswoman for the company said the CHIPS Act would accelerate the planning that has already begun for the second chip factory, which would be Fab 8.2 

The original chip factory, called Fab 8.0, employs roughly 3,000 people and is currently undergoing a $1 billion-plus expansion of its production capacity.

The yearslong drive to pass CHIPS — Creating Helpful Incentives to Produce Semiconductors — is framed as a boost for both the economy and national security of the United States. 

The U.S. share of world semiconductor production has plummeted in recent decades, leaving the nation reliant on a foreign supply chain vulnerable to disruption by rivals. New chip factories have been built overseas because, the industry says, foreign nations offer subsidies for construction of the expensive facilities.

U.S. Senate Majority Leader Charles Schumer, D-N.Y., who has pressed relentlessly for CHIPS, hailed its passage as a victory for the nation and for the state.

In a conference call with reporters, he especially hailed its potential impact on upstate New York, calling microchips the modern equivalent of the Erie Canal, which 200 years ago transformed the economy of much of upstate.

“This bill means lowering costs for families, strengthening our national security, and bringing manufacturing back to upstate New York,” he said. “With its rare combination of a world-class workforce, advanced manufacturers, and renowned higher-education institutions, I wrote and championed this legislation with upstate New York always at the forefront of my mind and now it is primed to reap the rewards. I want to see the future made in upstate New York.”

In more than two years of advocating for the spending, Schumer made multiple stops at GlobalFoundries, the Albany NanoTech Complex and other tech landmarks in the region to rev up local support for it.

It’s part of the roughly $280 billion CHIPS and Science Act of 2022, which also provides extensive research funding to improve competitiveness with China. Nearly two-thirds of the Senate voted for it Wednesday.

Funding in CHIPS includes:

  • $39 billion in federal incentives to build, expand or modernize domestic facilities and equipment for semiconductor fabrication, assembly, testing, advanced packaging or research and development.
  • $11 billion for Department of Commerce research and development including creating a National Semiconductor Technology Center. (Albany NanoTech is an ideal candidate to host the center, and universities across the state are well-positioned for research and development work, Schumer said.)
  • $2 billion for defense-related purposes.

There also would be $200 million for workforce development, $10 billion for regional technology hubs, $13 billion to expand the STEM workforce and $1.5 billion for the wireless supply chain.

Schumer mentioned multiple potential beneficiaries across the state, as well.

GlobalFoundries has set the stage for construction of Fab 8.2, securing rights to purchase land and town approval of construction. But it has not committed to building it.

“Preliminary work is underway,” a spokeswoman said Wednesday. “As we’ve said all along, the schedule of this expansion will be determined by achieving the right economic model, which includes investment and support from GlobalFoundries, our customers, New York state, and the federal government.”

She added: “CHIPS funding would help accelerate our expansion and add capacity at Fab 8, in Malta. Our goal is to be as shovel-ready as possible when that economic model is achieved, and the CHIPS Act is funded. As part of this forward momentum, we have engaged our regional and local government partners including the towns of Malta and Stillwater, who have been consistent supporters and equal partners in the Fab 8 expansion planning process.”

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2 Comments
FJ COLACINO July 28, 2022
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This is a great development.  America needs semi conductors and the Pelosi’s need the money. They’ll be on a fixed income soon, so planning ahead is wise.