By Sam Boughedda
GlobalFoundries Inc (NASDAQ:GFS) announced Monday that following the U.S. Chips and Science Act being passed last week, it has agreed on a deal with Qualcomm (NASDAQ:QCOM) to more than double their existing strategic global long-term semiconductor manufacturing agreement.
The deal was previously entered into by GlobalFoundries' and Qualcomm's subsidiaries.
"Today's announcement secures wafer supply and commitments to support U.S.-based manufacturing through capacity expansion at GF's most advanced semiconductor manufacturing facility, in Malta, New York," said GlobalFoundries.
Following the news, it was revealed in a filing that Qualcomm has agreed to buy $4.2 billion in additional semiconductor chips from the semiconductor contract manufacturing and design company's New York factory. It takes its total commitment to $7.4 billion through 2028, expanding on a previous $3.2 billion purchasing agreement between the two.
The chips will be used in 5G transceivers, Wi-Fi, automotive and Internet of Things (IoT) connectivity.
In a statement accompanying GlobalFoundries press release on the deal with Qualcomm, Senate Majority Leader Chuck Schumer said: "This is terrific news for GlobalFoundries, Qualcomm Technologies and for upstate New York. Just days after we passed my historic, bipartisan CHIPS & Science bill, we can already see the semiconductor industry reinvesting in the United States. This deal to 2028 proves what we have always known – that the industry will grow here when we are competitive with Asia and Europe. With major new federal incentives for microchip manufacturing in the U.S., I look forward to many more announcements like this to come."
GlobalFoundries shares jumped more than 11% on the news Monday, while Qualcomm is currently down 1.65%.