(Bloomberg) — GlobalFoundries Inc. will build a $4 billion chipmaking plant in Singapore slated to start in 2023, choosing Asia for the site of its latest expansion despite Biden administration calls to bring home semiconductor manufacturing.

The U.S.-based company joins rivals from Taiwan Semiconductor Manufacturing Co. to Samsung Electronics Co. that are expanding capacity to help address a persistent shortfall of chips for everything from cars to smartphones. GlobalFoundries — which is prepping a U.S. initial public offering that could value the chipmaker at $30 billion — said it’s focusing on Singapore but will also devote $1 billion apiece to building out its Dresden, Germany and U.S. sites.

GlobalFoundries will fund the lion’s share of that $6 billion global expansion with contributions from pre-payments for its capacity as well as government partnerships, Chief Executive Officer Tom Caulfield told reporters during an online briefing Tuesday.

“We’ll be accelerating our global footprint,” Caulfield said. “We have certain products for customers where they give us one of the products, it’s called taping-out, we can build in factories continents away. That gives us ultimate supply chain flexibility and security.”

The decision by GlobalFoundries, controlled by Abu Dhabi sovereign fund Mubadala Investment Co., coincides with debate in the U.S. and Europe about whether the high concentration of global chipmaking capacity in Asia carries national security implications. Caulfield said he was expanding in Singapore first because that’s where the company’s capacity is stretched.

The Biden administration is proposing to spend $52 billion to fund chip production and research at home, an effort to secure supply of the intricate components at the heart of most modern devices and many military systems. Beijing has appointed a top deputy of Xi Jinping’s to oversee the creation of a world-class industry of its own.

About “70% of all foundry manufacturing takes place in Taiwan, a couple of hundred miles away from China, from one company,” Caulfield said. “It’s put a huge risk to the world economy.”

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GlobalFoundries is a big investor in Singapore alongside peers Micron Technology Inc. and Infineon Technologies AG. It has previously committed to expanding production in the city state as well as in Europe and the U.S. Chipmaking facilities typically start producing chips 18 months to two years after breaking ground. When completed, GlobalFoundries’s Singapore facility, which will be a few generations behind the cutting edge, should primarily serve smartphone and auto demand.

Singapore itself has focused on expanding its talent pool in semiconductors, an industry it’s long sought foreign investment in. The chip sector is viewed as critical to the island’s electronics firms, which account for about 7% of the economy. In the first four months of this year, electronics output grew 21.7% from a year ago as demand surged in the wake of the pandemic. Singapore now aims to grow its manufacturing sector by 50% over the next 10 years to maintain its competitiveness.

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GlobalFoundries was created when Mubadala bought Advanced Micro Devices Inc.’s manufacturing facilities in 2009 and later combined them with Singapore’s Chartered Semiconductor Manufacturing Ltd. Contract chipmakers like Globalfoundries, TSMC and Samsung fabricate chips for large technology companies such as Apple Inc., Nvidia Corp. and Amazon.com Inc. that design their own silicon.

GlobalFoundries is going to market as governments from the U.S. to China gear up financial support for domestic semiconductor production, which is increasingly falling behind pandemic-era demand for everything from PCs to electric vehicles. The chip shortage has already forced several carmakers around the globe to idle plants and could cost them $110 billion in lost sales. Longer term, governments worry about lack of access to the critical components.

Caulfield said he expects chip demand to outpace supply over the next five to eight years. GlobalFoundries has sold out the capacity for the new Singapore fab and is now planning a second phase, he said.

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