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Customers are paying up front so the company can make more. A Marvell deal calls for expanding production at Vermont’s former IBM plant.
GlobalFoundries is speeding up investment in silicon germanium chips because customers want more than it can make,
CEO Tim Breen told investors Nov. 4. Customers are paying some of the money up front, he said, and an agreement with Marvell will help the company expand production at its Essex Junction plant.
Breen had flagged the shortage in May, when he said customers were already seeking more of the Vermont plant’s silicon germanium capacity than it could supply well into 2027. In September, Marvell signed an expanded multiyear agreement for more of that capacity. As Compass reported at the time, the Vermont chips go into devices that turn electrical signals into pulses of light and back again. That lets processors in an AI data center exchange information over fiber.
The quarterly filing shows how quickly that business is growing. GlobalFoundries’ company-wide sales to communications networks and data centers rose 81% in a year, from $175 million to $316 million. That market now brings in about one of every six dollars the company takes in, up from one in ten. GlobalFoundries credited demand for two technologies used in data center networks, silicon photonics and silicon germanium. The filing gives no separate sales figure for Essex Junction.
Overall, GlobalFoundries reported $1.9 billion in quarterly revenue and a $270 million net loss, compared with a $249 million profit a year earlier. The company attributed the loss mainly to a $441 million accounting charge, with no cash changing hands, for shares it issued to the federal government in September. Operating profit, which doesn’t count that charge, rose from $195 million to $230 million.
What happens next in Vermont.
In October, the U.S. Commerce Department agreed to redirect up to $955 million from an existing federal chipmaking award toward Essex Junction and Malta, New York. GlobalFoundries agreed to raise its own investment at the two plants to a combined $5 billion. Commerce gave no breakdown by state.
GlobalFoundries lists 1,800 employees and contractors at its Vermont site. Chief Financial Officer Sam Franklin said on the earnings call that the company can add much of its new production capacity inside factories it already operates, without building new ones. For Vermonters, the open question is whether that expansion will mean more jobs in Essex Junction. The company gave no local hiring projection. Readers can check current openings through GlobalFoundries and Vermont JobLink.
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The demand is there for more of a Vermont product. The question is now, what can Vermont democrats and progressives do to impede the progress by this for-profit manufacturer to meet that demand? May I suggest putting a surcharge on their electric rates or using some environmental laws to curb their water use? Can they convince some of the local protestor community to picket at the entrances to Global because they use exotic materials that are mined in impoverished third-world countries? Democrats have been successful so far in convincing Americans that building out new AI data centers is the equivalent of installing Chernobyl power plants, so in the spirit of Vermont-style social justice activism, the semiconductor industry should also not be spared from their Luddite wrath. So moonbats, if the anti-ICE thing is getting old, what better way is there to celebrate the triumphs of the mid-term elections than by showing some heartfelt opposition to high tech ingenuity and predatory capitalism at Global Foundries? Just dont forget to bring your iPhones along with your keffiyehs.