The Biden administration announced that it would offer $1.5 billion of taxpayer money to GlobalFoundries, the computer chip manufacturer, to expand production capacity at a factory in New York state and another in Vermont.

The news comes barely half a year after GlobalFoundries received its second such direct infusion of money from the US federal government with the passing of the 2022 CHIPS and Science Act authorizing more than $52 billion in US government spending for building up US manufacturing and research and development of computer chips.

The US Commerce Secretary Gina Raimondo, who hosted the event, reminded the audience that GlobalFoundries chips make everything from tanks to electric vehicles to smartphones to the internet work better.

Along with the direct funding, the government has promised to guarantee loans amounting to as much as $1.6 billion, and total investment from the private and public sectors can reach $12.5 billion.

These dollars will support GlobalFoundries in building a new semiconductor manufacturing fab campus in Malta, New York, expanding production lines at its Malta facility with the automotive supplier General Motors, and retrofitting a plant in Burlington, Vermont.

Each company was forecasting 1,500 manufacturing jobs, and 9,000 construction jobs would be created over 10 years; the settlement included a provision for $10 million in worker training to span the same period. Already, Global Foundries provided $1,000 each year to its workforce to subsidize childcare, and that benefit would be made available to construction employees.

The US Senate Majority Leader Chuck Schumer, one of the primary sponsors of the law that led to the chip factory subsidies, explained in an interview that with the pandemic, the US found itself powerless to take action due to a lack of chips to continue making vehicles.

Nonetheless, the message offered by Schumer amounted to bipartisanship: the US cannot cede a competitive economic advantage to China and Russia.

As Democrats have worried about questions about inflation and the precariousness of the still-healing economic recovery, they’ve spoken about the infrastructure investments as being long-term: investments in semiconductors and rebuilding roads and bridges Democrats say that voters are worried about the future and that’s why they say they support Democrats on investment to improve the country’s future.

Source: Josh Boak,Yahoo! Finance February 19, 2024