by Guy Page

In a sweeping move to bolster domestic semiconductor manufacturing and meet surging global demand for AI-enabling technologies, GlobalFoundries announced June 4 a $16 billion investment to expand its chip production and advanced packaging capabilities across its facilities in Essex Junction and New York.

The Essex Junction facility, formerly owned by IBM, employs about 1,800 people. In March 2024, Global Foundries also received $1.5 billion from the U.S. Department of Commerce, with $125 million of that funding earmarked for the Essex Junction facility.

According to a Global Foundries statement, the investment—made in coordination with the Trump Administration and supported by leading U.S. technology companies—marks one of the largest semiconductor manufacturing commitments in the nation’s history. The initiative underscores growing efforts to reshore critical supply chains and secure U.S. leadership in advanced technology production.

Dr. Thomas Caulfield, Executive Chairman of GlobalFoundries, credited the Trump Administration’s push for reshoring and industrial revitalization: “Today’s announcement is a direct result of President Trump’s leadership and his vision to reestablish secure, domestic supply chains for critical technologies.”

GF’s move responds directly to the explosive growth in artificial intelligence, which has created soaring demand for high-performance, power-efficient semiconductors. The company plans to expand its existing New York and Vermont operations, including additional investment in silicon photonics, gallium nitride (GaN) for power applications, and 22FDX® technology—key enablers of AI and edge computing performance.

The announcement comes with backing from tech giants including Apple, SpaceX, AMD, Qualcomm, NXP, and General Motors, all of whom emphasized the strategic importance of a U.S.-based chip supply in their remarks.

“GlobalFoundries has supplied semiconductors for Apple products since 2010,” said Apple CEO Tim Cook. “We’re excited to see them expand right here in the United States. These chips are a powerful example of American manufacturing leadership.”

SpaceX President Gwynne Shotwell added that GF’s expansion supports Starlink’s growing satellite internet services, noting the critical need for advanced semiconductors in aerospace and communications infrastructure.

The initiative includes an additional $3 billion dedicated to research and development, particularly in packaging innovation and next-generation GaN technology. The remainder builds on more than $13 billion already committed to manufacturing upgrades and the launch of the New York Advanced Packaging and Photonics Center—America’s first silicon photonics packaging facility.

“President Trump has made it a fundamental objective to bring semiconductor manufacturing home to America,” said U.S. Secretary of Commerce Howard Lutnick. “GlobalFoundries’ investment is a great example of the return of U.S. manufacturing for critical technologies.”

GlobalFoundries is among a select group of foundries positioned to meet U.S. national security and industrial goals, with trusted partnerships spanning consumer electronics, automotive, aerospace, and national defense sectors.

The company says this investment will create thousands of high-paying jobs, reinforce U.S. chip independence, and accelerate innovation in one of the world’s most critical industries.

According to an analysis by AllAmerican.org, after decades of offshoring, a powerful reshoring wave is building across American industry. But this shift isn’t happening in a vacuum. It’s the result of converging global and domestic forces that have altered the risk-reward calculus for manufacturers.

Fragile Global Supply Chains
The COVID-19 pandemic served as a wake-up call. When global trade ground to a halt in 2020, companies that depended on far-flung suppliers—especially in China and Southeast Asia—faced severe shortages, production delays, and empty store shelves. These vulnerabilities exposed just how fragile and overextended global supply chains had become. From semiconductors to PPE to baby formula, the cost of dependence on offshore manufacturing became painfully clear.

Rising Geopolitical Tensions with China
Over the past five years, U.S.-China relations have deteriorated significantly. Trade wars, intellectual property theft, national security concerns, and supply chain chokepoints (such as rare earth minerals and pharmaceuticals) have made China an unreliable manufacturing partner. U.S. policymakers and business leaders alike are responding by decoupling critical industries and seeking domestic or allied production alternatives.

Federal Policy Incentives
Massive federal investments have added powerful tailwinds to the reshoring movement. The CHIPS and Science Act, the Inflation Reduction Act (IRA), and the Bipartisan Infrastructure Law are injecting hundreds of billions of dollars into U.S. manufacturing. These laws include targeted tax credits, direct subsidies, and loan guarantees designed to bring back production in strategic sectors—from semiconductors and EV batteries to solar panels and biomanufacturing.

Escalating Overseas Costs
The once-overwhelming labor cost advantage of offshore locations like China and Vietnam is eroding. Wages in Asia are rising, and the cost of global shipping has become unpredictable—especially during times of geopolitical instability. When companies account for freight delays, tariffs, inventory risk, and quality control issues, reshoring often becomes cost-neutral—or even advantageous.

Consumer and Government Preference for “Made in USA”
Public trust in foreign-made products has declined, especially in areas tied to health, safety, and national security. At the same time, consumer demand for ethically produced, American-made goods is growing. The federal government has reinforced this trend with updated Buy American rules that prioritize domestic sourcing for federal procurement, creating added demand for U.S.-made inputs and products.

Technological Advancements Level the Playing Field
Automation, robotics, AI, and advanced manufacturing techniques like 3D printing are dramatically improving productivity in U.S. factories. These tools reduce the reliance on manual labor, lower operating costs, and allow companies to scale production efficiently at home. For many firms, these innovations make reshoring not just viable, but strategically smart.