WASHINGTON, Nov 20 (Reuters) - The U.S. Commerce

Department said Wednesday it has finalized a $1.5 billion

government subsidy for GlobalFoundries ( GFS ) to expand

semiconductor production in Malta, New York and Vermont.

The binding contract for New York-based GlobalFoundries ( GFS ), he

world's third-largest contract chipmaker, finalizes a

preliminary award announced in February after the company said

it was investing $13 billion over the next 10 plus years in its

U.S. manufacturing sites that serve automotive, smart mobile

devices, Internet of Things, data centers, and aerospace and

defense.

Commerce Secretary Gina Raimondo told Reuters last week the

department is racing to complete as many final agreements with

recipients under the $52.7 billion "Chips and Science" program

created in 2022 as possible before the Biden administration ends

on Jan. 20. "We're working as hard as we can," Raimondo said.

The Commerce award will support expansion of GlobalFoundries

Malta, New York fab by adding technologies already in use at

GF's Singapore and Germany facilities to provide chips for the

U.S. auto industry. New York state has also committed to

providing another $550 million in support, GF said.

GF also plans to build a new fab in Malta, New York "in

alignment with market conditions and customer demand" to produce

chips for automotive, AI, aerospace and defense.

"GF's essential chips are at the core of U.S. economic,

supply chain and national security," said GF CEO Thomas

Caulfield, calling the state and federal funding key "to ensure

our customers have the American-made chips they need to succeed

and win."

Commerce last week finalized its first major award -- a $6.6

billion government subsidy for Taiwan Semiconductor

Manufacturing Co's ( TSM ) U.S. unit. The first final awards

come just weeks before President-elect Donald Trump, who

criticized the program, takes office.

Commerce has allocated $36 billion for chips projects

including $6.4 billion for Samsung in Texas, $8.5

billion for Intel ( INTC ) and $6.1 billion for Micron

Technology ( MU ).

On Nov. 1, Commerce imposed a $500,000 penalty on

GlobalFoundries ( GFS ) for shipping chips without authorization to an

affiliate of blacklisted Chinese chipmaker SMIC. GF said it

regretted the inadvertent action.