Saratoga County

Defense bill may provide billions to GlobalFoundries, other U.S. computer chip makers

Schumer says overreliance on foreign-made computer chips is risky for nation
U.S. Sen. Charles Schumer, D-N.Y., listens as GlobalFoundries CEO Tom Caulfield speaks Friday at the Malta computer chip plant.
PHOTOGRAPHER:
U.S. Sen. Charles Schumer, D-N.Y., listens as GlobalFoundries CEO Tom Caulfield speaks Friday at the Malta computer chip plant.

Categories: Business, News, Schenectady County

MALTA — The GlobalFoundries computer chip factory in Luther Forest would potentially gain a significant boost toward expansion under provisions of the U.S. defense budget approved by the House and Senate for fiscal year 2021.

U.S. Sen. Charles Schumer, D-N.Y., paid a visit Friday to announce the news and discuss the potential impact on the $15 billion foundry, called Fab 8, where approximately 3,000 people already work.

GlobalFoundries has approval to build a second chip fab plant on the campus and has secured an option to buy additional land for the same purpose nearby. 

GlobalFoundries also has manufacturing facilities near Burlington, Vermont, and Beacon, N.Y., with a combined workforce of about 4,000. CEO Tom Caulfield said Friday that the company will likely expand first at its Fab 8 in Malta because space to grow is available within the existing building. 

“We still have about 40 percent of the floor space available for tooling,” he said. “It’s ready to go, and we built it for the expansion.”

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However, Caulfield added, GlobalFoundries’ expansion plans are not conditioned on the federal assistance contained within the proposed defense bill.

“We can only grow at a certain rate and pace without having an unsustainable business model,” he said. “With the U.S. doing this in partnership, we can accelerate. We were always going to do this, It’s not a question of doing zero or everything.”

Schumer said the defense bills had wide bipartisan support in both houses of conference and differences between the two versions are now being hammered out in conference before a final version goes to President Trump.


He estimated the value to the U.S. semiconductor imdustry at $25 billion over several years, and said its use would be flexible, not just for capital costs such as construction and equipment.

“This is a great thing for the U.S. and particularly for Malta, Saratoga County and the whole Capital Region, in terms of jobs and in terms of manufacturing pre-eminence,” Schumer said. “This is one of the most advanced semiconductor manufacturing facilities in the country, in the world.”

Semiconductor manufacturing is a long stretch from the guns and warplanes one traditionally associates with the defense budget, but it is key to national security, Schumer and Caulfield said. Computer chips are part of almost everything in the modern world, including weapons systems, and having so few of them produced in the United States — just 12 percent of the global market — leaves the nation vulnerable to disruption of the supply chain, they explained. 

Both said the COVID-19 crisis, with its shortages of key medical supplies, pointed out the risks of relying on foreign sources of critical material. Schumer noted the additional risk entailed when one of the biggest origins of such goods is China, a potentially unfriendly rival.

China and other countries have heavily subsidized their domestic computer chip manufacturers, Schumer said. The provision he got included in the defense bill will give equal footing to U.S. manufacturers, he added.

“The first thing is, level the playing field on capital,” Caulfield said. “We’ll outrun them on productivity and capability.”

Caulfield said GlobalFoundries’ decision to stop researching the next generation of ever-smaller, faster chips (and the subsequent layoff of hundreds of employees in the Capital Region) did not indicate it would stop growing, just that it was changing its focus. And the change might not be forever, he added.

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