Semiconductor manufacturer GlobalFoundries is committing a total of $16 billion to strengthen its U.S. operations, aiming to secure domestic supply chains and meet skyrocketing demand driven by AI, automotive innovation, and geopolitical uncertainty. The company announced on June 5 that it will invest an additional $3 billion to expand its advanced packaging and manufacturing capabilities in Malta, New York, and Essex Junction, Vermont — two cornerstone facilities in its U.S. production footprint.

This new investment adds to the $13 billion previously committed to the same sites, which also includes construction of a new advanced packaging and testing center on the Malta campus. According to a company press release, the funds will support R&D efforts focused on packaging innovation, silicon photonics, and gallium nitride (GaN) technologies, which are increasingly essential for high-performance computing and AI-enabled infrastructure.

Driving Factors: Onshoring and Tariff Avoidance

The decision aligns closely with President Donald Trump’s push to expand U.S.-based chipmaking, which includes a proposed 25% tariff on imported semiconductors. The policy push has prompted companies like GlobalFoundries to double down on American manufacturing capacity and reduce reliance on foreign suppliers.

The company has been gradually repositioning its production focus back to its domestic sites, with strategic emphasis on supporting critical U.S. industries like automotive, aerospace, and defense.

“Semiconductors are critical to the future of vehicles, and their importance will only grow,” said Mark Reuss, president of General Motors, in the June 4 announcement. “GlobalFoundries’ investment supports our work to secure a reliable, U.S.-based chip supply — essential for delivering the safety, infotainment and features our customers expect.”

At a February earnings call, then-CEO Thomas Caulfield highlighted the rationale behind this shift: “We need to have the ability to source from different regions,” he said. “And I think it’s just raising the height of importance of diversification and supply chain with customers.”

Caulfield’s comments came amid mounting pressure on companies to manage global risks, including fluctuating trade relations and potential disruptions in Asian semiconductor hubs.

Leadership Transition and Policy Uncertainty

The company's leadership also recently changed hands. Tim Breen, formerly Chief Operating Officer, was appointed CEO on April 28, succeeding Caulfield. Breen now oversees not just a critical expansion but also ongoing negotiations and compliance with federal funding programs tied to semiconductor incentives.

In November 2024, the U.S. Department of Commerce approved $1.5 billion in CHIPS and Science Act funding for GlobalFoundries’ New York and Vermont operations. An additional $550 million was earmarked for upgrades and expansion. However, the status of that funding remains uncertain as the Trump administration reconsiders the future of the CHIPS Act. The company declined to comment on whether the newly announced investment might be impacted.

Adding to the tension, the Commerce Department recently revoked $210 million in previously awarded federal grants intended for six regional tech hubs — including $23 million for Vermont’s Gallium Nitride Tech Hub, a project GlobalFoundries co-founded with the University of Vermont and the state government. The facility is focused on developing GaN devices and cultivating a specialized semiconductor workforce in the region.

Rising Demand from AI and Domestic Supply Chain Strategy

AI growth is a significant catalyst for GlobalFoundries’ investment. As cloud computing and edge AI applications scale rapidly, demand is rising for the company’s FDX (Fully Depleted Silicon-on-Insulator) platforms, GaN technologies, and silicon photonics — all crucial for building faster, more efficient chips.

“The rapid rise of AI in both the cloud and at the edge is driving the adoption of new technology platforms and 3D heterogeneous integration technologies,” GlobalFoundries stated in the release. “These advanced solutions are essential to meet the exponentially growing requirements for power efficiency, bandwidth density and performance.”

Breen emphasized that this strategic direction aligns with both national and commercial interests. “At GlobalFoundries, we are proud to partner with pioneering technology leaders to manufacture their chips in the United States — advancing innovation while strengthening economic and supply chain resiliency,” he said.

GlobalFoundries is working closely with top U.S. firms such as Apple, General Motors, SpaceX, AMD, Qualcomm Technologies, and NXP, all of which have a vested interest in reducing exposure to overseas production risks.

Looking Ahead

As the global chip race intensifies, GlobalFoundries is positioning itself as a cornerstone of America’s semiconductor future. While challenges remain — from federal funding uncertainty to competition from Asian manufacturers — its expanded investments could play a pivotal role in building a more resilient, domestically anchored supply chain.

Originally reported by Sara Samora in Construction Dive.