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MoneyWatch


BIDEN PROVIDES CHIP MAKER WITH $1.5 BILLION TO EXPAND PRODUCTION IN NEW YORK,
VERMONT

February 19, 2024 / 10:25 AM EST / CBS/AP

 * 
 * 
 * 

The CHIPS Act: Made in America, again

The Biden administration said Monday the government is providing $1.5 billion to
the computer chip company GlobalFoundries to expand its domestic production in
New York and Vermont.

The announcement is the third award of direct financial support for a
semiconductor company under the 2022 CHIPS and Science Act. The law enables the
government to invest more than $52 billion to revitalize the manufacturing of
computer chips in the United States as well as advance research and development.



"The chips that GlobalFoundries will make in these new facilities are
essential," Commerce Secretary Gina Raimondo said on a call with reporters.
"They power sophisticated military equipment, electric vehicles. They assure
smartphones have the latest features, enable faster Internet connections for
Americans."

Click here to view related media.
click to expand

In addition to the direct funding, the government would also provide loans worth
up to $1.6 billion, with a total combination of public and private investment
expected to equal roughly $12.5 billion.

GlobalFoundries intends to use the funding to help pay for the construction of a
new advanced chip factory in Malta, New York, increase production at its
existing plant in Malta as part of a strategic agreement with General Motors,
and revitalize its plant in Burlington, Vermont.

The projects are expected to create 1,500 manufacturing jobs and 9,000
construction jobs over the next decade. As part of the terms of the deal, $10
million would be dedicated to training workers and GlobalFoundries will extend
its existing $1,000 annual subsidy for child care and child care support
services to construction workers.

Senate Majority Leader Chuck Schumer, D-N.Y., who also announced the
billion-dollar grant on X, was an architect of the law that enables the funding
of chips factories, a technology that he said was as essential to the U.S.
economy and national security as food. Semiconductors, or microchips, are needed
for a wide range of products and devices, from laptops and cars to home
appliances and medical equipment.

> BIG: @GlobalFoundries secured a $1.5B CHIPS agreement to build a 2nd fab in
> NY’s Capital Region creating thousands of new good paying jobs supporting
> America’s auto industry and national security.
> 
> It's NY's first & the nation’s largest award thus far from my CHIPS & Science
> Law.
> 
> — Chuck Schumer (@SenSchumer) February 19, 2024



Schumer said in an interview with The Associated Press that the United States
could be vulnerable to disruptions as it was during the coronavirus pandemic
when auto plants lacked enough chips to keep making vehicles. That shortage cost
the U.S. economy $240 billion, according to experts, awakening lawmakers and
industries to the country's almost total dependence on foreign manufacturers for
such a crucial component. 

The U.S. produces just around 12% of the world's supply and it has relied
heavily on chips produced in Asia, CBS News reported at the time of the global
chip shortage. Today, one company in Taiwan called the Taiwan Semiconductor
Manufacturing Company (TSMC), supplies 90% of the world with computer chips for
its most advanced processors.

"The Democrats are going to do what it takes to see that other countries —
China, Russia and others — don't gain economic advantage over all of us,"
Schumer said.


KEY ECONOMIC ISSUE

With a major election this year that puts control of the White House and
Congress on the line, the health of the U.S. economy has been a serious concern.
Republican lawmakers have stressed that inflation rates that peaked in 2022 have
hurt family's buying power, an immediate pressure point that has hurt President
Joe Biden's approval.

But Democrats have stressed their efforts to ease inflation and the long-term
investments that they say will drive growth forward, such as the investments in
computer chip production and infrastructure.



Schumer also said that these investments — which had a degree of bipartisan
support — reflected the Democrats' emphasis on investing in the country's in
ways that could potentially pay off in the coming decades.

"People want to see we have a future," Schumer said. "It makes a huge impression
on the American people."


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First published on February 19, 2024 / 10:27 AM EST

© 2024 CBS Interactive Inc. All Rights Reserved. This material may not be
published, broadcast, rewritten, or redistributed. The Associated Press
contributed to this report.


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