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Capital Region vying for billions in federal chip funding

Larry Rulison March 22, 2021  Updated: March 22, 2021 6:45 p.m.

ALBANY — Fab 8.2 may be only just the beginning.

A push by President Joe Biden to get Congress to approve a $37 billion federal  subsidy program aimed at bolstering the domestic computer chip manufacturing sector against Asian competition could help GlobalFoundries pay to build a second chip factory at the company’s Fab 8 campus in Malta.

But it could also help the state’s Albany Nanotech complex on the SUNY Polytechnic Institute campus land a new federal computer chip research lab called the National Semiconductor Technology Center that would be the envy of the nation.

The end result could mean billions of dollars in federal, state and corporate semiconductor industry investment pouring into the Capital Region and other parts of upstate over the next decade.

“It’s a perfect fit,” said Doug Grose, president of NY CREATES, the non-profit entity that oversees the state-supported chip industry research operations at SUNY Poly and affiliated sites across upstate.

Grose told the Times Union that the NY CREATES advisory board, whose members come from a variety of industry and academic backgrounds, will meet next Monday, March 29, to discuss the best way to try and land the National Semiconductor Technology Center.

“We could start at time zero,” Grose said, noting that Albany Nanotech is already considered the most advanced computer chip research center in the country with available chip production lines that could be expanded as needed.

“It would be phased in over time,” Grose said.

Biden’s $37 billion computer chip manufacturing initiative was actually started under the Trump administration in response to China’s growing influence in the computer chip industry at the expense of the United States. The idea of China controlling key aspects of the semiconductor industry’s supply chain and manufacturing output has worried the Defense Department for years as the U.S. chip industry has consolidated and outsourced more and more of its production overseas.

The coronavirus pandemic, which has disrupted the global supply chain for chips, triggering a ripple effect on the auto industry and others, has only made the issue more pressing.

GlobalFoundries, which employs 3,000 people at its Fab 8 chip factory in Malta, would be a likely beneficiary of the $37 billion fund that Biden is pitching Congress.

GlobalFoundries CEO Tom Caulfield recently told Reuters that GlobalFoundries would seriously consider building a second chip factory in Malta if Congress approves the program, which was originally spelled out — but not financed — in the Defense Department budget bill passed by Congress just before Trump left office in January.

The program was originally proposed by U.S. Sen. Chuck Schumer, D-N.Y., now the Senate Majority Leader, under a bill called the CHIPS Act. That measure was eventually rolled into the Defense Department spending bill, although technically Congress must still approve the spending, which would provide subsidies to companies like GlobalFoundries to build new U.S. production facilities and launch the federal chip research lab.

Second chip fab in Malta only a matter of ‘when,’ Caulfield says

“It’s not a question of  if,” Caulfield told Reuters for a story earlier this month. “It’s just a question of when. And a key element of going forward will be the funding of the CHIPS Act.”

Computer chip factories today cost between $10 billion and $15 billion. GlobalFoundries spent nearly $1 million during the last three months of 2020 lobbying Congress and the Trump administration on the CHIPS Act and other initiatives.

Grose said the National Semiconductor Technology Center would attract billions in federal, state and industry investment, which would make it far larger than any previous research labs created at the SUNY Poly campus. It would also likely involve a computer chip packaging center that NY CREATES operates in Rochester if New York was awarded the center.

Just last week, U.S. Secretary of Commerce Gina Raimondo met with representatives from the Semiconductor Industry Association, whose membership includes GlobalFoundries and other chip companies, to update them on Biden’s plans.

“I believe we need to make strong investments in domestic manufacturing, research and workforce, and help strengthen America’s global leadership in semiconductor manufacturing and innovation,” Raimondo said. “This is the beginning of what I believe will be an ongoing dialog between the Department of Commerce and industry leaders as we find innovative ways to invest in domestic manufacturing.”

The hope that GlobalFoundries will land some of the CHIPS Act funding has already bolstered optimism in Saratoga County, where Fab 8 is located, says Shelby Schneider, president of the Saratoga County Prosperity Partnership, an economic development group.

“That’s really exciting.” Schneider said.