There is a worldwide computer chip shortage that is severely hampering many industries including the auto industry and the military in this country. An upstate New York-based manufacturing firm is ready to take on the challenge to fill the void by creating more chips of all sizes so this crisis never happens again.

Company officials at the Saratoga County-based GlobalFoundries in Malta, New York, say this new capacity will serve the growing demand for secure, feature-rich chips needed by high-growth markets including automotive, 5G connectivity and the Internet of Things, which means the interconnection via the internet of computing devices embedded in everyday objects, enabling them to send and receive data.

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Comparing breaches in cybersecurity at chip manufacturing plants with the Arab oil boycott of the 1970s, Al Shaffer of the Potomac Institute for Policy Studies said, “Data is our new oil.”

Shaffer, who served in the Trump administration as deputy under secretary of defense for acquisition and sustainment, told the Jewish Press that “the banking and financial industries, electric grid, air traffic control networks, seaport of departure, health care system since the health records are all digital and airports are all in danger of a cyber attack which could bring a halt to this country.”

Seaports of departure, Shaffer explained, are “those major seaports where you have all of your commercial and military transportation going out… If someone was able to cut off the communications capabilities or the equipment you use for loading the ships, you’re down. The seaport transportation system is all done with mechanized cranes. You shut that crane down you’re not moving any cargo.”

Shaffer said by the time the new chip fabrication plant is built in upstate New York, the crisis may have already overtaken us.

“Most Americans don’t realize what a critical juncture we are at and the fact that if our supply chain for microelectronics is cut off we will not be able to function as we do now,” Shaffer said. “The problem with micro electronics is it takes four to five years to build a new factory. It will take some time for us to extricate ourselves from this. It very much matters where something is produced. For those things that are critical to our national security I think we have to make sure to have an incentive system to use domestically produced chips.”

The United States will also find it difficult to get ahead of our enemy nations because we don’t prop up the private sector the way other countries do.

“You have to do (the manufacturing) so that you’re cost-competitive and a number of countries such as China, Taiwan and Korea very heavily subsidize their industry,” Shaffer said. “So U.S. companies start out with anywhere from a 30 percent disadvantage cost-competitively. It then becomes incumbent upon the U.S. government and citizens to determine whether they are willing to pay more or pay something to make it a level playing field.”

The five-year projection mentioned by Shaffer is close to what the leadership at GlobalFoundries maintains it will take them to build their new chip manufacturing plant, known as Fab 8.2. GlobalFoundries is planning on investing $1 billion dollars in construction and manufacturing to build a complex over the next several years that will add 1,000 good-paying jobs to its current facility. GlobalFoundries, newly branded as simply GF, currently employs nearly 3,000 workers at its $15 billion manufacturing facility, known as Fab 8, in the bucolic confines of this upstate county nestled 10 miles south of Saratoga Springs and 25 miles north of Albany.

Meanwhile, according to GF CEO Tom Caulfield, the company will invest $1 billion to add an additional 150,000 wafers (computer chips) per year within its existing fab to help address the global chip shortage.

Senate Majority Leader Charles Schumer (D-New York) said, “The GlobalFoundries fab here is completely maxed out because of the shortage. They have contracts in line for years to come and that’s why they need to build this great new plant.”

Caulfield and Senate Majority Leader Charles Schumer (D-New York) Schumer touted the influx of jobs the new fab will usher into the region.

“We will be creating more than 1,000 new direct high-tech jobs and thousands more indirect jobs including high-paying construction jobs for the region,” Caulfield pointed out. “Our industry is expected to grow more in the next decade than it did in the past 50 years and GF is stepping up to do its part as we work together to address the growing demand for technology innovation for the betterment of humanity.”

With Schumer’s powerful support, the U.S. Senate recently passed the U.S. Competition and Innovation Act, which will invest $52 billion in the domestic semiconductor industry. The House has yet to act on the measure, however. If the measure does not pass the House, much of this hoopla might be for naught.

“The planned fab [will…] focus primarily on auto and military chip production, supporting national security requirements for a secure supply chain,” said Schumer. “This will aid in expanding the domestic supply chains of critical chip technology.”

Caulfield aims for his company to be in the forefront of the “Made in America” trend the Trump administration pushed to create.

“Many semiconductor companies do great designs but they rely on others like GlobalFoundries to manufacture them. Many of them are done between China and Taiwan,” Caulfield told The Jewish Press. “We need to get a better supply chain balance. We need to invest in manufacturing in a meaningful way in the U.S. With 12 percent of chip manufacturing made in this country versus 48 percent of the demand generated in the U.S. we don’t have a demand issue, we have a manufacturing capacity issue. With industrial policy issues it’s not about rich countries or poor countries it’s about making globally competitive investments in partnership with this industry that will fix that dynamic and for the more secure and safe stuff.”

“Zero percent of real leading edge chips are made in America,” U.S. Commerce Secretary Gina Raimondo told The Jewish Press. She agreed with Shaffer’s point made earlier in this article. “That’s exactly why we are making these big government investments to incentivize the production of the feature-rich chips and the more bleeding edge chips right here in America, which is the best way to protect ourselves. All of the supply chain and talent and raw materials that go into making those chips also ought to be in America.

“If it’s on our shores or on the shores of an ally, we feel a lot better about it and that’s not where we are now, which is why the $52 billion isn’t just a giveaway to companies. It’s a huge strategic investment made by the United States government to make sure we secure our national security by making such a precious commodity right here on our shores.”

Meanwhile Schumer pointed out that for a century and a half chips were always a part of the region. Holding up a bag of potato chips in one hand and a computer chip wafer in the other, Schumer said,

“As we all know the potato chip was invented in Saratoga (Springs) 150 years ago. Saratoga was known for these 150 years ago, it’s going to be known for this for the next 150 years as we go from one kind of chip to another. With the Fab8.2 we’ve cemented the Capital Region as the world leader and the epicenter of domestic chip production. To all the folks from GlobalFoundries and all of the companies that work with them, we thank you for establishing the company here in the Capital Region. Let’s let the sequel not just be equal but even better.”

Just call the senator Mr. Chips.

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Marc Gronich is news director of Statewide News Service. He also operates the website JBizTechValley.com. He has been covering government and politics since 1981. His Albany Beat column appears monthly in The Jewish Press.
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