GlobalFoundries has announced new plans to dedicate $16 billion to expanding its U.S. chip production. The largest contract chipmaker in the U.S., GlobalFoundries announced the decision in response to "unmet demand" in the U.S. for local clients such as Apple and Qualcomm.
GlobalFoundries specified that $13 billion of the funds will go towards expanding the company's existing New York and Vermont fabs, with the remaining $3 billion dedicated to researching advanced packaging and other new technologies. The company claims it is carving out "lucrative niches" in the chipmaking world, such as the research of photonic chips or the use of gallium nitride (GaN) in chips.
The $16 billion commitment from GlobalFoundries is a major change in tradition for the company, which has spent around $1.4 billion every year for the past five years on new plants and equipment. Compare this to Intel's annual construction budget of $14 billion in 2024 and years prior.
New CEO Tim Breen, appointed to the position in February of this year, makes no claims about when the new funds will be spent. Breen prefers to "stay flexible" in the face of endorsements from high-profile clients, including Apple, Qualcomm, and General Motors.
Breen seemingly views GlobalFoundries as well-positioned in the face of much market and chip-industry insecurity prompted by the heavy tariffs consistently being issued from the White House. "Supply security matters," said Breen in an interview, claiming that GlobalFoundries' clients are looking for more local production and to "reduce dependence on suppliers that have their manufacturing concentrated in one location".
The back half of the last quote is likely a dig at Taiwan-based TSMC, the largest contract chip fab in the world, which currently holds over 50% market share. Comparatively, GlobalFoundries' approximately 5% market share and inability to produce chips below its 12LP+ process node (comparable to TSMC's 10nm) would make it seem ill-positioned to be throwing meaningful digs at TSMC.
GlobalFoundries' reliance on legacy process nodes is still a profitable existence thanks to the "AI boom" seen in enterprise spending. Breen claims this most recent announcement is "a strategic response to the explosive growth in artificial intelligence" seen in recent years. GlobalFoundries' website marketing seems largely reliant on the low power consumption of its legacy chips, a key concern for enterprise clients as data center power draw grows beyond 100 MW.
How this $16 billion commitment manifests is yet to be seen. Thanks to GlobalFoundries' entrenchment in the U.S. and its commitment to plant expansions rather than new construction, it is thankfully highly unlikely that the company will pull a Foxconn and completely abandon its commitments. The insecurity and untrustworthiness of the barrage of tariff announcements, however, may lead to the timescale of these projects being pushed back later and later as time goes on.
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