The U.S. government awarded a $1.5 billion grant to chip company GlobalFoundaries (NASDAQ:GFS) to expand semiconductor production and strengthen the semiconductor supply chain in the U.S. As a part of this initiative, GFS will build a new semiconductor production facility in Malta, New York, and expand its operations in Burlington, Vermont. In addition to the grant, the U.S. government will offer loans of $1.6 billion.
This funding is expected to stimulate an estimated $12.5 billion in total potential investment across the two states. It is anticipated that this grant is likely to create over 10,000 jobs, and the projects aim to bolster national security and meet demand for chips in various sectors. The new facility in Malta is expected to produce high-value chips that are not manufactured anywhere in the U.S., Commerce Secretary Gina Raimondo commented.
This investment is part of the U.S. Government’s CHIPS and Science Act, and Raimondo stated that the government is planning to award several funds to different companies over the coming weeks as part of its $39 billion program. There are also rumors that Intel (NASDAQ:INTC) could win a $10 billion subsidy from the government.
Is GFS a Good Stock to Buy?
Analysts remain cautiously optimistic about GFS stock with a Moderate Buy consensus rating based on six Buys and four Holds. Over the past year, GFS has slid by more than 10%, and the average GFS price target of $61.88 implies an upside potential of 15.9% at current levels.
