click to enlarge - Courtesy Of Globalfoundries
- A GlobalFoundries employee on the production floor in Essex Junction
GlobalFoundries plans to invest millions of dollars in its Essex Junction plant over the next several years, powered by $1.5 billion that the Biden administration awarded the company on Monday.
The federal government will give Vermont's largest private employer $125 million in cash and tax credits to refurbish the company’s large semiconductor plant outside of Burlington, according to Joan Goldstein, commissioner of the state Department of Economic Development. She
didn’t release more details about the size of the overall investment or the number of jobs that are expected to be created in Vermont
The bulk of the $1.5 billion will go to the GlobalFoundries plant at its headquarters in Malta, N.Y. The money will pay for an expansion of the Malta factory, as well as the construction of a brand-new fabrication facility there.
GlobalFoundries is the first manufacturer to receive money from the 2022 CHIPS and Science Act, a Biden administration initiative aimed at strengthening the U.S. role in the production of semiconductors. The chips are essential to manufacturing in the automotive, aerospace, defense and artificial intelligence industries.
GlobalFoundries has said the semiconductor market is expected to double over the next decade. According to the National Institute of Standards and Technology, there are only four companies outside of China that provide semiconductor manufacturing at GlobalFoundries' scale.
In a
statement applauding the announcement, U.S. Sen. Bernie Sanders' (I-Vt.) office noted that about 85 percent of phones use a GlobalFoundries chip.
Demand for the chips soared during the COVID-19 pandemic as sales of smartphones and other products spiked. But supply chain disruptions led to shortages, causing a backlog of deliveries in the automotive and other industries. The CHIPS and Science Act is intended to consolidate manufacturing in the U.S. to prevent future disruptions.
“GF’s new fab will be uniquely positioned to capture the feature-rich mature, essential chip segment which is expected to continue to represent more than 60 percent of the semiconductor market,” GlobalFoundries said in a statement.
The company is also preparing to upgrade and expand capacity at its Essex Junction fabrication facility. The plant is expected to manufacture next-generation gallium nitride (GaN) semiconductors for use in electric vehicles, power grids, data centers, 5G and 6G smartphones, and other critical technologies, the company said. GaN is an emerging material in semiconductor manufacturing.
Over the next decade-plus, GlobalFoundries said, it plans to invest more than $12 billion in its New York and Vermont plants through public-private partnerships.
“Combined, these investments are expected to create over 1,500 manufacturing jobs and about 9,000 construction jobs over the life of these projects,” the company said.
With an estimated workforce of 1,800, the GlobalFoundries plant in Essex Junction is a major player in the Chittenden County — and Vermont — economy. The investment announced on Monday will enable the facility to develop an on-site solar energy system that supplies up to 9 percent of the energy used at the plant, the
National Institute of Standards and Technology said in a
press release. The factory complex consumes more power annually than Burlington, Vermont's largest city.
“This shows how much confidence that the Biden administration has in Vermont,” Goldstein said. “They’re willing to invest hundreds of millions of dollars in Chittenden County. It speaks highly of our Vermont workforce.”
GlobalFoundries plans to continue to build its apprenticeship program and will extend childcare benefits, including a $1,000 annual subsidy, to construction workers. The Essex Junction plant says it will work toward using only carbon-neutral energy sources.
“This is a well-deserved recognition of GlobalFoundries’ commitment to bolstering the on-shore growth of U.S.-made chips,” U.S. Sen. Peter Welch (D-Vt.) said in a statement. "Even more impressive, this new site will see its commitment to sustainability through with a plan to use carbon-free neutral energy practices — leading in innovation and in action.”
Gov. Phil Scott thanked the Biden administration and Vermont’s congressional delegation for working on the investment.
“This is huge news for Vermont and the region,” the governor said in a statement.