In the first major award from its $39bn fund to help boost domestic chipmaking capacity, the US Department of Commerce (DOC) is to give $1.5bn in subsidies to GlobalFoundries.

In recent months, the DOC – which is overseeing the fund – has announced two smaller awards: $162m for Microchip Technology and $35m for BAE Systems.

GlobalFoundries, which ranks among the world’s largest contract chipmakers, will use the funding to build a new chipmaking facility in Malta, New York state – which aims to ensure a steady supply of advanced chips for automakers including General Motors – while also expanding its existing operations at that site and in Burlington, Vermont. This Vermont site will be home to the first US facility capable of producing a type of chip used in electric ehicles, the power grid, and 5G and 6G phones. According to officials, GlobalFoundries’ Vermont site would face closure without the grant.

The $1.5bn grant will be accompanied by $1.6bn in loans. According to the DOC, the funding...