The U.S. government has announced a plan to provide over 2 trillion won (US$1.5 billion) in subsidies to the U.S.-based semiconductor company GlobalFoundries. This marks the first large-scale support initiative since the enactment of the CHIPS and Science Act (CSA) in 2022 aimed at building the semiconductor supply chain in the United States. Consequently, expectations are high that domestic semiconductor companies, including Samsung Electronics, will also benefit from this support.
The U.S. Department of Commerce announced on Feb. 19 (local time) that it has signed a preliminary agreement to provide US$1.5 billion in support for GlobalFoundries’ new equipment investment and expansion in New York and Vermont.
Vice President Kamala Harris issued a statement on the day, emphasizing that “the semiconductors to be produced with this support will provide stability to the semiconductor supply chain for the U.S. automotive and aerospace industries, which are currently heavily reliant on overseas sources.”
Gina Raimondo, the U.S. Secretary of Commerce, stated, “Throughout the pandemic, the U.S. automotive industry has suffered from shutdowns due to semiconductor supply shortages,” adding, “With today’s support, such incidents will not occur again.”
GlobalFoundries supplies semiconductors to companies such as General Motors and Lockheed Martin. While its size is very small compared to TSMC, the largest semiconductor foundry in the world, GlobalFoundries is the largest foundry company in the United States.
The final agreement will be confirmed after due diligence, and the support funds will be provided stage by stage as equipment investments progress.
This subsidy payment marks the third support plan for semiconductor companies by the U.S. government since the implementation of the CSA in August 2022, and it is the first large-scale support project. Under the CSA, the U.S. has committed to providing a total of US$53 billion in subsidies to companies building semiconductor factories domestically.
As a result, there is growing interest in the scale of future support from the U.S. government for major global semiconductor companies. About 170 semiconductor companies, including Samsung Electronics and SK hynix, have submitted more than 460 letters of intent for investment to receive subsidies from the U.S. government.