U.S. Government Awards GlobalFoundries $1.5 Billion From CHIPS Act; Big Intel Subsidies Soon?

Investors Business Daily via MSN ^ | 02/20/2024 | Ed Carson

[SeekAndFind]

The U.S. government on Monday said it will give GlobalFoundries $1.5 billion as part of the U.S. CHIPS and Science Act to boost domestic chip manufacturing. That comes amid reports that the Biden administration could provide more than $10 billion in funding to Intel. Intel and especially GlobalFoundries rose Tuesday on the news.

Please watch the video at Investors.com - Market Rally Faces Nvidia Test; Super Micro, Lennar, Weatherford In Focus

GlobalFoundries will use the funds to expand and improve its existing fabrication plant in Malta, New York, as well as build a new fab on that Malta campus. It'll also improve a Vermont facility.

GlobalFoundries, which makes chips for others, aims to invest a total of $12 billion over 10 years, including public funding. New York state will chip in with $575 million in direct funding, plus $45 million in related aid. The GlobalFoundries funding is the first significant award from the 2022 CHIPS and Science Act, which has $75 billion for loan and loan guarantees as well as $39 billion set aside for grants

Intel CHIPS Act Award Near

Meanwhile, the Biden administration is in discussions to provide more than $10 billion in CHIPS Act subsidies to Dow chip giant Intel, Bloomberg reported Friday evening, citing sources. The funding is expected to include outright grants as well as loans.

Intel is building or expanding chip plants in Ohio, Arizona and New Mexico with a combined $43.5 billion price tag.

Completion of the Ohio chipmaking project was recently pushed until late 2026 vs. prior plans for production to start in 2025.

Ohio and Arizona are presidential battleground states.

Taiwan Semiconductor Too?

In recent weeks, there have been reports that the Biden administration would begin ramping up CHIPS subsidies.

[SeekAndFind]

In addition to Intel and GlobalFoundries, chip foundry titan Taiwan Semiconductor Manufacturing and Micron Technology are seen as likely recipients. Taiwan Semiconductor, which makes chips for Apple, Nvidia and many others, is building two plants in Arizona.

[alancarp]

Normally, I’d complain a lot about this... and I probably should still complain that the free market should have solved this problem a long time ago (rabble, rabble).

That said, there’s 2 competing thoughts overriding that knee-jerk reaction:
1. We’re almost certainly at a ‘national security implications’ point where chop production is concerned.
2. Given that (and the influences involving this administration), I’m not at all certain that Taiwan is the place to be investing.

[1Old Pro]

So in effect GF is a taxpayer owned production plant with no benefit to the funding source, the taxpayers.

[PGR88]

WE are the (neo) Marxists now

Our 21st century, post-modern, woke ideologue, central-planning leaders destroy private industry through 10,000 bad tax, education, environmental, energy, trade and social policies.

But when one area of long-term destruction turns into a political crisis, they shower printed money down upon the top cronies in the industry.

[dblshot]

So what’s the kickback to dems on this deal?

[FrankRizzo890]

Intel is among the wokest of the woke, so it wouldn’t surprise me to see them getting bailed out.