GlobalFoundries Inc (NASDAQ:GFS) shares gained Thursday after it was announced that the U.S. Department of Defense (DoD) has awarded the company a new 10-year contract for a supply of securely manufactured, U.S.-made semiconductors.
The company has received an initial award of $17.3 million this month, while the overall 10-year spending ceiling of the contract is $3.1 billion.
The new contract will provide the DoD and its contractors with access to GFS's semiconductor technologies manufactured at its U.S. facilities. GFS said the semiconductors will be used across various critical aerospace and defense applications.
The company's shares are currently up 1.55% at over $58 per share. In 2023, the stock is up more than 8%.
"GF is proud to begin this new chapter of our decades-long partnership with the U.S. government and to continue serving as the leading supplier of securely manufactured essential chips for the U.S. aerospace and defense industry," commented Mike Cadigan, chief corporate and government affairs officer at GF. "This partnership provides DoD programs with 'front-door access' to advanced technologies in a way that is scalable and highly efficient."
The new deal is the third sequential 10-year contract of its kind between the DoD and GFS's Foundry business.