WASHINGTON, Aug 8 (Reuters) - GlobalFoundries, one of the world's top chip manufacturers, plans to seek U.S. government funding from the recently approved CHIPS Act to update its chip factory in Vermont, CEO Tom Caulfield told Reuters on Monday.
The facility, located in Essex Junction, Vermont, produces 200 millimeter wafers and needs to be revamped, Caulfield said. "With partnership investments with the U.S. government, we can create a facility that has been around for 50, 60 years and give it its next 50, 60 years of longevity," he said.
The remarks come a day before U.S. President Joe Biden plans to sign the CHIPS act into law. It will provide $52 billion in subsidies for chip manufacturing and research, as well as an estimated $24 billion investment tax credit for chip plants.
Caulfield declined to provide an estimated cost for the modernization, noting that it depended on the government funding allocation, but said the goal is to increase automation and replace old and costly tool sets with state-of-the-art equipment.
"It's not necessarily about creating more output that's the first order. It's about making sure it's a globally competitive facility," he added.
When asked about GlobalFoundries' plans vis-a-vis the CHIPS Act, Caulfield also mentioned previously announced plans to build out capacity at the company's existing facility in Malta, New York, as well as to build a new factory there.
GlobalFoundries's New York site is where it plans to produce $4.2 billion in chips as part of an agreement announced earlier on Monday with chipmaker Qualcomm, more than doubling its prior commitment to $7.4 billion in purchases through 2028.
GlobalFoundries is the world's third-largest foundry by revenue behind Taiwan Semiconductor Manufacturing Co Ltd and Samsung Electronics Co Ltd, but ranks second when stripping out Samsung's foundry business that makes chips for other elements of the South Korean firm.
The company, which is majority owned by Abu Dhabi's sovereign wealth fund Mubadala Investment Co, raised $2.6 billion in an initial public offering last year on the Nasdaq. (Reporting by Alexandra Alper; Editing by Josie Kao)