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Abu Dhabi’s Globalfoundries to Make Microchips for U.S. Jets, Missiles, Spy Satellites

06/05/2016

The Pentagon has decided to rely on an Abu Dhabi-owned company to supply the most advanced microchips used in U.S. spy satellites, missiles and combat jets. 

A senior U.S. Defense Department official said in an interview that the Pentagon has reached a seven-year agreement with Globalfoundries Inc., one of the big four global chip makers, to supply the microchips. Terms weren’t disclosed. 

The agreement ends months of uncertainty over supplies of such chips but is just the first step in a broader effort to protect sensitive military systems from cyberattacks and other tampering. 

Globalfoundries last year acquired from International Business Machines Corp. IBM, -0.40% the two plants — in Burlington, Vt., and East Fishkill, N.Y. — that make the chips. IBM had been the near-monopoly supplier of the chips to the Pentagon for more than a decade and paid Globalfoundries $1.5 billion to take the unprofitable business off its hands. 

Lawmakers and watchdogs such as the Government Accountability Office had expressed concern about the Pentagon’s reliance on a single source for some of its state-of-the-art chips. 

The Pentagon also is moving away from a reliance on purely U.S.-made chips, widening its net of vendors to keep up with changes in commercial technology that are outpacing the defense world. 

 

 

(Source: MarketWatch; issued 05.06.2016)

Date: 
06/05/2016
Companies & Organizations: International Business Machines Corporation
Defense Products & Services Sectors: 

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