GlobalFoundries Inc. (NASDAQ:GFS) shares are trading lower on Wednesday despite the announcement of a significant award from the U.S. Department of Commerce.

The company has been granted up to $1.5 billion in direct funding through the CHIPS and Science Act, aimed at strengthening U.S. semiconductor manufacturing. This award builds on a previously signed memorandum of terms from February 2024 and is expected to drive critical expansion in chip production to support key industries such as automotive, smart devices, IoT, data centers, and aerospace and defense.

The funding will support three key projects. First, GlobalFoundries will expand its Malta, New York facility, incorporating advanced technologies already in use at its Singapore and Germany sites to meet the U.S. auto industry's growing chip demand.

Second, the Essex Junction, Vermont fab will undergo modernization to increase the production of next-generation gallium nitride (GaN) semiconductors for electric vehicles, data centers, and other vital applications.

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Lastly, a new state-of-the-art fab will be constructed on the Malta campus to meet increasing demand for U.S.-made chips in industries like AI, aerospace, and defense.

According to Benzinga Pro, GFS stock has lost over 29% in the past year. Investors can gain exposure to the stock via Renaissance IPO ETF (NYSE:IPO).

Over the next decade, these expansions will result in an investment of over $13 billion and are expected to create nearly 1,000 direct manufacturing jobs, alongside more than 9,000 construction jobs. Additionally, GlobalFoundries will continue workforce development efforts in New York and Vermont, including STEM outreach and new training programs. The company is also committed to sustainability, ensuring that all expansion projects align with its environmental goals.

Price Action: GFS shares are trading lower by 2.01% to $41.53 at last check Wednesday.

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