The U.S. Department of Commerce, leveraging the CHIPS Act, is investing $1.5 billion in federal grants and loans to GlobalFoundries for chip production expansion in New York and Vermont, with New York state adding $600 million in support.

The total projected investment for expanding domestic semiconductor capacity reaches $12.5 billion, with the goal of creating 1,500 manufacturing and 9,000 construction jobs over the next decade.

This move addresses national security and economic concerns heightened by the recent chip shortage, aiming to increase the U.S.'s 12% share of global chip production and reduce reliance on foreign manufacturers.

President Joe Biden's administration has announced a separate $1.5 billion grant as part of the Chips and Science Act to further support the construction of a new semiconductor factory in New York, with GlobalFoundries as a beneficiary.

The US government's efforts are part of a broader $52 billion initiative to strengthen domestic semiconductor manufacturing in response to falling behind China and to ensure a secure supply chain for critical industries and defense.

The GlobalFoundries grant represents the largest allocation under the Chips and Science Act to date, following grants to BAE Systems and Microchip Technology, and parallels similar efforts in Germany and the EU to fortify their local semiconductor production.