U.S. chipmaker GlobalFoundries secured a $3.1 billion supply deal from the Department of Defense Thursday.
The 10-year deal is for U.S.-made semiconductors for aerospace and defense applications, and includes an initial award of $17.3 million this month, with a 10-year spending cap of $3.1 billion. It's the third sequential 10-year contract between the department and GlobalFoundries.
The Defense Department will also gain access to GlobalFoundries' designs, IP libraries and "front-door" access to new technologies, the chipmaker's Chief Corporate and Government Affairs Officer Mike Cadigan said.
Cadigan emphasized the security GlobalFoundries can provide to protect U.S. national security information and ensure chips produced are uncompromised.
"For this work, GF is accredited to provide the right level of security required for each program, from GF’s industry leading GF Shield protections, to strictly export controlled handling (e.g. [International Traffic in Arms Regulations]), to the highest level of accredited microelectronics manufacturing security on the planet," Cadigan said in a statement.
GlobalFoundries has made gains in recent months to prove the security of its U.S. semiconductor facilities. In May, the company's Malta, New York, factory was accredited by the Department of Defense as a Category 1A Trusted Supplier, making it eligible to produce chips for critical aerospace and defense uses. The company joins the ranks of companies like Boeing, General Dynamics, Honeywell, IBM and Lockheed Martin in gaining the accreditation.
"Trusted Supplier accreditation continues to be a benchmark in semiconductor assurance and will ensure the DoD has reliable access to a range of securely manufactured chips it needs for its defense systems," Nicholas Martin, director of the department's Defense Microelectronics Activity program, said in a statement in May.
Even before its latest accreditation however, GlobalFoundries was signing new deals with the Defense Department. In May 2022, the two signed a $117 million semiconductor supply deal for use in national security systems, made at GlobalFoundries' Malta site.
The chipmaker is also bringing in defense contracting heavyweights to help its work in national security. GlobalFoundries inked a partnership deal with Lockheed Martin in June to increase the security of domestic supply chains for U.S. national security systems, leveraging the chipmaker's technology and manufacturing practices.
Such deals are in line with the department's own push for heightened security around semiconductor manufacturing and its goal of making the U.S. less reliant on foreign chip suppliers.
Defense Department officials are using the CHIPS and Science Act to fund domestic semiconductor production, including $238 million announced Wednesday for the creation of regional innovation hubs to spur greater R&D in the sector. One of the hubs will be based in GlobalFoundries' home state of New York, with $40 million in funding.
"President Biden's CHIPS Act will supercharge America's ability to prototype, manufacture, and produce microelectronics scale," Deputy Secretary of Defense Kathleen Hicks said in a statement. "CHIPS and Science made clear to America — and the world — that the U.S. government is committed to ensuring that our industrial and scientific powerhouses can deliver what we need to secure our future in this era of strategic competition.
