The Pentagon plans to place up to $2 billion in rush orders by early March for customized semiconductors used in weapons like the B-2 bomber before the shut down of production line, Bloomberg reports.
Globalfoundries Inc (GFS) sold the factory in Fishkill, New York, that produced the specialized chips used in GPS-dependent systems to ON Semiconductor Corp (ON). The new owner will not make any more of them.
The Defense Department is confronting its looming supply crunch amid a global chip crisis used in consumer items from mobile phones to autonomous vehicles, markets where GlobalFoundries is expanding its production.
The Pentagon would place an initial $885 million by Dec. 15 with U.S. contractors. The Pentagon would have to place the remainder of the $2 billion in orders by March 3, the report added.
“For certain programs and technologies, we are meeting the DoD’s needs by manufacturing large volumes of chips sufficient for the lifetime of the program,” GlobalFoundries said.
“In other instances, we are partnering with the DoD to extend the lifecycle of certain technologies manufactured at Fab 10 by transitioning the manufacturing of their chips to other GF Fabs.”
GFS shares traded lower by 6.71 percent to $59.36 on the last check Monday.
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