US DoD Expands Trusted Chip Deal with GlobalFoundries

Article By : George Leopold

Another step toward rebuilding the U.S. semiconductor supply chain...

The U.S. Pentagon continues to ramp up its investment in a secure semiconductor supply chain, most recently adding another $400 million line of credit to acquire advanced and legacy chips from a trusted supplier.

Earlier this month, the Defense Microelectronic Activity (DMEA) raised the ceiling on its existing contract with GlobalFoundries to continue producing “leading edge, current and legacy microelectronics.” The $400 million increase ups the total value of the Defense Department’s multi-year arrangement with GlobalFoundries to more than $1.1 billion.

That moves follows a $10.27 billion contract modification to eight systems vendors announced in June.

DMEA and its Trusted Access Program Office essentially serve as a broker to ensure a steady flow of chips ranging from advanced to end-of-the-line devices used in U.S. weapon systems.

GlobalFoundries is a long-time supplier to the U.S. military, and what amounts to a new line of credit will maintain the IC supply chain. The chip maker operates trusted facilities in Burlington, Vt., and two in New York at East Fishkill and Malta. Fab 9 in Vermont and Fab 10 in East Fishkill were acquired from IBM in 2015.

GlobalFoundries announced in May it would upgrade its Fab 8 facility in Malta to comply with U.S. export controls on sensitive technologies. It has also implemented a “GF Shield” program that includes internal controls designed to protect customers’ intellectual property.

These and other initiatives are designed to secure the U.S. semiconductor supply chain. DMEA’s raised ceiling for chip procurements is “strong recognition of that fact,” said Ezra Hall, director of GlobalFoundries’ aerospace and defense business line.

Strictly speaking, the DoD spending increase represents a line of credit rather than a standard purchase order. “Think of it as a credit card limit,” Hall said in an interview.

The chip maker declined to comment on specific military applications covered under the ceiling increase. When asked about chip packaging, an area along with test and assembly being emphasized in recent U.S. initiatives designed to reinvigorate domestic chip manufacturing, Hall indicated its contract with DMEA includes some “post-fab activities.”

GlobalFoundries has joined the growing industry chorus for greater investment in chip manufacturing and securing the microelectronics supply chain. “I don’t think the U.S. can [remain] a leader if it’s not a leader in R&D” aimed at semiconductor technology,” Hall said.

Meanwhile, the pure-play foundry continues to make the case there is plenty of demand among military and commercial customers for devices manufactured at intermediate process nodes. With the rise of 5G-enabled AI technologies deployed at the network edge, “We need to be making chips that are smarter, not smaller,” Hall argued.

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