The U.S. Commerce Department has finalised a $1.5 billion subsidy for GlobalFoundries to expand semiconductor production in New York and Vermont.

This contract follows a preliminary award revealed in February, tied to GlobalFoundries’ commitment to invest $13 billion in U.S. manufacturing over the next decade.

The expansion will enhance GlobalFoundries’ facility in Malta, New York, incorporating advanced technologies used in its Singapore and German sites. This upgrade will enable the production of chips primarily for the automotive industry.

New York state will contribute an additional $550 million for the project. GlobalFoundries also plans to establish a new fabrication plant in Malta to produce chips catering to automotive, AI, aerospace, and defence markets.

GlobalFoundries CEO Thomas Caulfield emphasised the importance of these chips for U.S. economic stability, supply chains, and national security. He stated the funding is essential for meeting customer needs for American-made chips.

This award is part of the broader “Chips and Science” program, which has allocated $52.7 billion for semiconductor projects. Recently, a $6.6 billion subsidy was awarded to Taiwan Semiconductor Manufacturing Company’s U.S. operations.

Other significant allocations include $6.4 billion for Samsung in Texas, $8.5 billion for Intel, and $6.1 billion for Micron Technology.

On another note, GlobalFoundries faced a $500,000 penalty for unauthorised chip shipments to a Chinese affiliate, for which they expressed regret.