US Government to Provide $20 Billion Semiconductor Subsidy to GlobalFoundries

Expected Announcement of Additional Subsidy Support in Early March

The U.S. administration under Joe Biden is providing $1.5 billion (approximately 2 trillion KRW) in semiconductor subsidies to the domestic semiconductor company GlobalFoundries. This is part of the CHIPS and Science Act (CSA) aimed at building a semiconductor supply chain within the United States. Attention is also focused on the future subsidy amounts for major global semiconductor companies such as Samsung Electronics, Intel, and TSMC.

On the 19th (local time), the U.S. Department of Commerce announced that it had signed a preliminary agreement to provide $1.5 billion to GlobalFoundries for new facility investments and expansions in New York and Vermont.

This marks the third semiconductor subsidy plan by the U.S. government since the implementation of the CSA in August 2022, and the first large-scale support project. Under the CSA, the U.S. has decided to provide a total of $53 billion (approximately 71 trillion KRW) in subsidies to companies building semiconductor factories domestically.

Lael Brainard, Chair of the White House National Economic Council (NEC), emphasized, "Today's investment will protect our national security by expanding domestic production of semiconductors used in satellites, aviation, and space communications."

GlobalFoundries supplies semiconductors to General Motors (GM), Lockheed Martin, and others. Although the company is much smaller compared to TSMC, the world's largest semiconductor foundry, it is the largest foundry company within the United States. The Department of Commerce expects that this subsidy will create 1,500 manufacturing jobs and 9,000 construction jobs over the next 10 years.

This subsidy announcement has also drawn attention to the future scale of U.S. government support for major global semiconductor companies. More than 170 semiconductor companies, including Samsung Electronics and SK Hynix, have submitted over 460 letters of intent for investment to receive U.S. government subsidies.

The semiconductor industry expects that subsidy support plans for major companies such as Intel will be announced one after another ahead of President Joe Biden’s State of the Union address scheduled for the 7th of next month. Observers predict that as the Biden administration intensifies efforts to promote economic policy achievements ahead of the November presidential election, the pace of semiconductor subsidy support will also accelerate.

However, there are also forecasts that delays in permits due to environmental impact assessments and a shortage of skilled semiconductor workers will cause the construction of major semiconductor companies’ factories in the U.S. to take longer than expected.

This content was produced with the assistance of AI translation services.