GLOBALFOUNDRIES (GF), a global provider of feature-rich semiconductor manufacturing, and GlobalWafers Co., Ltd. (GWC), one of the top silicon wafer manufacturers in the world, announced an $800 million agreement to add 300mm silicon-on-insulator (SOI) wafer manufacturing and expand existing 200mm SOI wafer production at GWC's MEMC facility in O'Fallon, Missouri.
The silicon wafers produced by GWC are key input materials for semiconductors and an integral part of GF's supply chain. The wafers are used in GF's multi-billion-dollar manufacturing facilities, or fabs, where they are used to manufacture the computer chips that are pervasive and vital to the global economy. The announcement expands GF's domestic silicon wafer supply from the United States. In particular, the 300mm wafers made at GWC's MEMC site in Missouri will be used at GF's most advanced manufacturing facility, Fab 8 in Malta, New York, and the 200mm wafers made at the Missouri site will be used at GF's Fab 9 in Essex Junction, Vermont. These wafers will be used to create feature-rich semiconductor solutions to meet the sharply growing demand for GF's advanced RF technologies across a range of applications including 5G smartphones, wireless connectivity, automotive radar, and aerospace.
The long-term agreement includes nearly $210 million in capital expenditures to expand GWC's MEMC facility in Missouri and will create more than 75 new jobs. The 300mm pilot line is on track to be completed in Q4 this year. The agreement is strengthened by $9.4 million in investments and support from the State of Missouri, as well as support from the City of O'Fallon, Ameren Missouri, Spire, and Greater St. Louis, Inc.
GF is investing $1.4 billion in 2021 alone to expand its manufacturing capacity, meet the needs of customers and address the growing global demand for computer chips. As part of this growth, GF will require an increased supply of wafers like those made by GWC. GWC is one of the world's leading manufacturers of 200mm SOI wafers and has a long and ongoing relationship with GF for supplying 200mm SOI wafers. In February 2020, GWC and GF announced intentions to collaborate closely to significantly expand GWC's existing 300mm SOI wafer manufacturing capacity. This announcement signals a significant step forward in that collaboration.
The announcement comes at a time when the United States is seeking to fortify and expand its semiconductor supply chain, which enables the $91 trillion world economy. Only 12 percent of the world's semiconductor manufacturing capacity is in the United States. Critical to increasing the number of chips manufactured in the U.S., and making U.S. chip manufacturing more globally competitive, are federal investments like those enabled by the bipartisan-supported U.S. Innovation and Competition Act and the already passed CHIPS for America Act.
U.S. Sen. Roy Blunt of Missouri, an instrumental supporter of the U.S. Innovation and Competition Act said that semiconductors are critical to their national security and economic competitiveness. The supply chain of these computer chips is highly complex and largely dominated by other countries. He further added that they need to begin making more chips at home to protect U.S. industries from chip shortages as they have seen in recent months. This announcement is good news for semiconductor manufacturing and will create steady, good-paying, high-tech jobs for Missourians.
GF CEO Tom Caulfield stated that as a trusted semiconductor manufacturer and supplier to the U.S. government, and the world leader in RF semiconductor technology, GF has been leading the charge to accelerate U.S. semiconductor manufacturing and boost their capacity to meet the growing global demand for chips. The kind of partnership they are announcing with GWC is only possible thanks to Congressional leadership and the renewed national interest in growing U.S. semiconductor manufacturing capacity.
Doris Hsu, Chairman and CEO of GWC commented that they are proud to deepen their strategic partnership with GF and to expand their important role in the U.S. semiconductor supply chain. They thank the State of Missouri for its support. They also thank their incredible O'Fallon team, whose dedication and hard work have enabled their success and growth. They look forward to ramping up their 300mm pilot line this year and accelerating their build-out with GF.
Missouri Governor Mike Parson stated that they are proud to see a Missouri business step up to address the critical semiconductor need they are seeing in countless industries all across their state and nation. MEMC's expansion will strengthen the global semiconductor supply chain, promote American manufacturing, and support good-paying jobs in Missouri.
O'Fallon Mayor Bill Hennessy said that for more than six decades, they have been the home of MEMC and its manufacturing of world-class silicon wafers. O'Fallon takes pride in providing a business and family-friendly environment with a high quality of life that supports MEMC's success. They are thrilled by this new partnership between GlobalWafers and GLOBALFOUNDRIES and the positive impact it will have on their city, state and nation.
GF employs more than 7,000 people across the U.S. Over the past 12 years, the company has invested $15 billion in U.S. semiconductor development, and it is doubling its planned investment in 2021 to expand global capacity and support growing demand from the U.S. government and industry customers for secure processing and connectivity applications.
