One day after President Joe Biden signed the CHIPS act into law, GlobalFoundries announced an extension of its agreement with Qualcomm Technologies Inc. to increase the supply capacity of silicon wafers.
As part of the agreement extension, Qualcomm will incrementally purchase more than $4 billion in wafers from GF, which are manufactured at its Malta facility. With this extension, the total long-term agreement with Qualcomm now represents more than $7 billion in global revenue across multiple technologies through 2028.
“This is terrific news for GlobalFoundries, Qualcomm Technologies, and for upstate New York,” said Senate Majority Leader Chuck Schumer, who worked to secure the CHIPS and Science legislation. “We can already see the semiconductor industry reinvesting in the United States. This deal to 2028 proves what we have always known – that the industry will grow here when we are competitive with Asia and Europe. With major new federal incentives for microchip manufacturing in the U.S., I look forward to many more announcements like this to come.”
The announcement was made at a summit in Washington, D.C., that sought to shine a spotlight on the importance of domestic silicon chip manufacturing to national and economic security. The summit, co-hosted by GlobalFoundries, Applied Materials, and the Ford Motor Co., featured CEOs and industry leaders from across the semiconductor supply chain. Those in attendance included National Economic Council Director Brian Deese, Under Secretary of Defense for Acquisition and Sustainment William LaPlante, and National Security Council Senior Director for Technology and National Security Tarun Chhabra.
“GF’s global manufacturing footprint enables us to partner with our customers to meet their capacity needs where they need it,” said Thomas Caulfield, president and CEO of GF. “Our collaboration with Qualcomm Technologies delivers differentiation and innovation in mobile and IoT (the internet of things) spanning three continents, and this long-term agreement extension provides Qualcomm Technologies with additional U.S.-based manufacturing for a more resilient supply chain.”
Though it was once dominant in semiconductor chip manufacturing, the United States in recent years has lost ground as other countries, such as China, increased wafer production. Supply-chain disruptions, partially caused by the COVID-19 pandemic, forced many American manufacturers to import chips, which are essential to the production of cars, medical equipment, and smartphones, among other items.
Caulfield said the agreement extension “secures Qualcomm Technologies as a key long-term customer in our most advanced fab in upstate New York, which together with U.S. CHIPS and state funding, will fuel expanding GF’s U.S. manufacturing footprint. We applaud the bipartisan efforts and leadership demonstrated by Senator Schumer and the incredible support of Commerce Secretary (Gina) Raimondo to bring back chip manufacturing to America.”
“With accelerating demand for 5G, Automotive and IoT applications, a robust supply chain is critical for ensuring innovation in these areas remains uninterrupted,” said Qualcomm Technologies’ Roawen Chen, senior vice president and chief supply chain and operations officer. “Our continued collaboration with GF helps us to expand the next generation of wireless innovation as we move toward a world where everyone and everything can be intelligently connected.”
In a statement, GlobalFoundries said investments it receives from the $52 billion as part of the CHIPS legislation “will be combined with similar investments being made by GF and its customers to expand the company’s manufacturing, research and development at its U.S. manufacturing locations. GlobalFoundries stands ready to deliver on the promise of the CHIPS and Science Act and turn the bill’s potential into action, results, and growth of an industry created in America.”
Also this past week, GF and ST Microelectronics signed an agreement to jointly operate a 300mm semiconductor manufacturing facility in Crolles, France. GlobalFoundries said that the new facility, adjacent to ST's existing 300mm plant, will triple GF's chip-making capacity in Europe through 2028.