Japan will fund up to $21 billion for two New York semiconductor factories operated by GlobalFoundries under an ongoing trade pact, according to multiple reports. The US government will take a stake in the plants, while GlobalFoundries collects operating and licensing fees and the US expands its overall ownership in the chipmaker to about 7 per cent.
A cross-border semiconductor pact is taking shape in upstate New York, backed entirely by foreign investment capital and anchored by some of the names in consumer technology. Japan will invest up to $21 billion in two new chip factories to be built near the company’s headquarters in Malta, New York. The facilities will be co-owned by the US government and Japanese interests, while GlobalFoundries handles operations and technology licensing.
How the 21 Billion Dollar Funding Structure Works
The arrangement bypasses traditional corporate balance-sheet financing by shifting the upfront capital burden entirely onto Tokyo. While Japan will provide all of the investment capital, the US government will secure an ownership stake in the completed sites. GlobalFoundries, which remains majority-owned by Abu Dhabi’s Mubadala Investment Co, will earn steady fees from building and running the plants alongside licensing its proprietary manufacturing technology.
The project stems from an overarching trade agreement struck by President Donald Trump’s administration, in which Japan pledged $550 billion in US investments in exchange for the US lowering tariffs on Japanese automobiles and other imports from at least 25 per cent down to 15 per cent. Under the bilateral framework, Washington selects the specific projects that Tokyo funds. Available free cash flows from the investments are slated to be split evenly between both nations until a specific allocation is reached, after which 90 per cent of the cash flow will flow to the US.
Timeline, Production Targets, and Early Customers in Malta
GlobalFoundries intends to lay the foundation stone for the first factory at its Malta site during this year. When fully operational, the first facility alone is projected to add roughly 900,000 wafers annually to domestic manufacturing capacity.
GlobalFoundries CEO Tim Breen noted that the company is lining up primary buyers to keep the new production lines busy. Initial customers for the New York expansion include Japan’s Renesas Electronics and iPhone maker Apple.
Beyond the primary manufacturing lines, the project is expected to generate local employment. Regional estimates point to approximately 27,000 jobs created across construction and the surrounding supply chain ecosystem, alongside more than 1,000 direct manufacturing roles in New York’s Capital Region.
Federal Equity Stakes and Adjustments to CHIPS Act Grants
In a separate transaction running parallel to the Japanese funding deal, the US government will acquire a 4 per cent equity stake in GlobalFoundries itself. This direct acquisition brings total federal ownership in the chipmaker to about 7 per cent.
As part of the federal realignment, GlobalFoundries also restructured an existing award under the CHIPS and Science Act. The company reallocated $955 million to expedite investments into advanced packaging, silicon photonics, and silicon-germanium technologies across its facilities in Malta, New York, and Burlington, Vermont.
GlobalFoundries Shares Climb as Financing Model Reduces Risk
Financial markets responded swiftly to the announcement. GlobalFoundries shares climbed more than 4 per cent in early trading following the news, building on a broader surge that has seen the stock gain over 33 per cent across the year.
Analysts note that the financing model shields the manufacturer from the traditional capital expenditure risks associated with building multibillion-dollar fabrication plants. Rather than taking on heavy debt or equity dilution to fund construction, GlobalFoundries secures domestic capacity while earning operational and licensing revenue.
The investment will also circle back to equipment manufacturers. Breen confirmed that at least some of the capital expenditure will flow to Japanese semiconductor toolmakers, specifically naming Tokyo Electron alongside US competitors as vital partners in outfitting the new lines.
